High Quality New Build Properties Neededfjpinvestment
There is a growing problem emerging in the UK surrounding a lack of new build property. 8.4 million people are living in unaffordable and unsuitable housing.
To add to this, a further 3.6 million live in overcrowded homes. The housing crisis is quickly becoming one of the major problems facing the country, one that appears to have somewhat slipped under the radar. Until supply begins to rise, millions of people across the UK will continue to live in bad conditions, being priced out of the market.
Why not just build more houses?
The obvious solution here is to build new houses. This is, unfortunately, far easier said than done. Developers are having increasing difficulty accessing finance needed to kickstart construction. New builds are also failing to hit a high standard, with many taking longer to construct than anticipated and home buyers being uninspired by the projects. Challenges are regularly encountered during this process.
The recent 2019 Conservative Party Conference offered some hope to homebuyers, however. A whole host of new policies have been proposed tackling some of the issues currently facing the housing market.
Amongst these new policies was the relaxation of planning requirements, focussed on those looking to build up, adding an existing floor or two their existing homes. In the hopes that people will begin to build “up, not out”, this could be an interesting approach to take to the housing crisis. Credit where it is due, this is the thinking outside the box approach that we have cried out for over the past year or so.
Is the new-build situation a major issue?
It is important to make clear that, although the creative approach to this is appreciated, there are widespread vocal concerns about the unattractive, and sometimes unsuitable developments being created. An equal, growing concern is the location of the new developments – often in areas that lack the infrastructure to sustain the additional housing in terms of education and transport.
Recent research conducted by us here at FJP Investment understood the growing issues emerging in the new-build market and decided to reach out to homebuyers and property investors and ask them what their opinion was surrounding new-build property.
The research, although somewhat predicted, was pretty damning. 63% of those asked actively stated that the properties being constructed were unattractive and devoid of character, supporting these existing, voiced concerns in the market.
Touched on prior, there is a problem emerging in the location of new-build properties. 57% of respondents said that new-build were built in inconvenient locations, with 48% stating they were concerned about the lack of infrastructure surrounding the location of new-build developments.
As well as expressing concerns over the quality of the properties themselves and the finish they receive, a massive two thirds of homebuyers believe that new builds are too expensive. For perspective, the average new-build property is a surprising £60,000 higher than the average house price.
Rather worryingly for property developers, 60% of homebuyers believe that an overall poor standard is evident with new builds. Bad workmanship has been evident in recent new builds, with problems only emerging a while after the sale of the property. Houses and flats therefore need to be built to a better standard and in areas of greater transport links.
Looking at the bright side
The Government is aware of these perceptions, to be fair. Recent speeches drawing attention to the ‘ugly’ homes built across the UK will apparently have no future in the UK market. In addition, the UK public are at least very aware of new build properties and appreciate the importance they play in creating housing for people.
Our research showed that over three quarters (75%) of homebuyers had seen a new build whilst undertaking the property search. Clearly then, there is demand for these houses. In addition, not all developers are falling under this blanket statement of ‘ugly’ homes.
Many exciting new-build developers are pushing the limits for when it comes to aesthetically pleasing designs that appeal to what homebuyers want. The recent news of inside Norwich’s award-winning council houses will inspire developers and buyers alike when it comes to affordable, energy efficient houses, something homebuyers are crying out for.
However, whilst the bulk of new builds continue this ‘ugly’ trend, coupled with inconvenient location, the housing crisis will continue to be thwarted in this regard. It is essential that the Government plans going forward consider the result of these findings with great attention, but also the fact we need to increase housing supply with quality, not quantity.
Download the report here