Demand takes off – and so do the prices
How good is it? If you are a property developer, the answer is very good. If you are an estate agent, the answer is – often as not – even better. In fact, if estate agency sales are one sign of a good market, then so are the reports coming out of the property industry.
The surveys all agree that prices are rising. Rightmove has prices up by 3.3 per cent year-on-year with an 18 per cent jump in the number of new sellers.
The National Association of Estate Agents reports that new property prices have hit a six-year high as supply continues to fall. Nationwide says house prices continue to rise and Acadata says they were up an average of £1,348 in January.
The number and buying power of international purchasers are one reason prices are moving up.
According to estate agent Wetherell, the most influential group of buyers in London now are from India. Purchasers from India have invested in more than £1 billion-worth of homes, estates, hotels and leisure outlets in the past 18 months. They are now the largest group of overseas buyers in Mayfair, comprising 25 per cent.
Last year overseas-based Indian buyers spent almost £450 million on 221 homes in central London with the top three most popular locations being Mayfair, St Johns Wood and Belgravia.
With all this going on, surely a property developer does not need clever marketing?
The kinds of incentives on offer to buyers now are less based on buy-one-get-one-free and more on why-not-buy-two. Galliard Homes is offering a London flat and a Cornish “surfer’s suite”.
From just £324,950, Galliard’s “surf and turf” offer allows buyers to get a London flat and a second home in Galliard’s Pebble Beach village, close to Fistral Beach in Cornwall. Galliard reckons that a lot of the UK’s 250,000 surfers live in London.
David Galman, sales director at Galliard Homes, says: “Some of our metropolitan buyers love surfing, sailing, swimming, water sports and the outdoors and it’s something they miss living in London. If Londoners would rather let out their “surfer’s suite”, rather than using it as a second home, then Pebble Beach can offer them a six per cent net return guaranteed for five years.”
Meanwhile, north London estate agent Statons has invested in a private armchair tour of its clients’ homes. It has moved into property videos, using filmmaker Homes on Camera, which produces high-definition video tours for estate agents and property developers, fronted by TV star Melissa Porter.
She says: “To a buyer it means giving your home a personality and allowing potential buyers a private ‘out of hours’ tour.
“Until now, still photos and vidiettes [a series of photos stitched together] have been used to market and sell properties. But Homes on Camera has taken this a step further, allowing the viewer a private, armchair view into each property.
“It’s amazing to see how for such an affordable price, these videos can make a property really stand out in the crowded world of social media.”
For some developers, marketing during a boom is about putting your resources into off-plan sales. Around half of a new Rickmansworth development – 33One – has sold off-plan. A collection of 10 one/two-bedroom apartments and two-bedroom duplexes, 33One Rickmansworth is a scheme by Glenmore Residential. Prices start from £285,000 and agent is Preston Bennett New Homes.
Hamptons, which bought the Stanmore-based Preston Bennett agency at the start of the year, plans to expand its UK network, which currently includes 72 branches across London and the South of the UK.
Marc Goldberg, Hamptons International’s head of residential sales, said this network has grown by 18 per cent over the past two years and the purchase is a key part of this growth strategy.
Sue Fisher, Preston Bennett’s managing director, says: “It signals a new and exciting chapter for the company, allowing us to fuse our strong local market knowledge with Hamptons International’s UK network and resources.”
It is agent for another off-plan launch, The White House in Bushey, developer Heronslea’s scheme of 15 two-bedroom and one-bedroom apartments.
A centrally-located development with secure underground parking, it is a few minutes’ level walk to local shops and the synagogue. Off-plan sales are traditionally the mark of soaring property prices.
Stuart Law, CEO of Assetz, which advises on the buy-to-let market, says that the market is not characterised by rising prices so much as limited stock of homes to buy. He says: “New-built stock is actually running low at the same time as our investor appetite for off-plan is returning nationwide. The efforts to improve the planning process and potential release of brownfield land announced by the government are welcome but let’s see some quick action and buy-in here from local authorities; rhetoric alone won’t deliver supply.”
Building work is flat out. Builder M & Sons, which is renovating Edgware United Synagogue, says its order book is looking healthy.
But they have one word of warning for developers. Clients may be spending more money than they were a year ago and ordering higher specifications, but for some that’s a way of avoiding buying a new home.
“Everyone is smiling and spending,” says Meni Edreyi of M & Sons.
“The market is very strong. People are spending a lot more money on their houses, some of them up to half a million on an existing house, because it’s cheaper for them to do that than move house.”