Blaze Marketing have recently increased the team and appointed Benazeer Singh as the new Account Manger focusing on our residential marketing offer. Over the course of the past year we have experienced positive and continued growth and one of the key areas where future expansion has been identified is the residential market, which has led to our most recent appointment. Being based in Manchester and offering strategic marketing resources to property companies around the UK, we have decided to push our services to the residential sector too. Due to market trends and economic statistics we see a need for creative marketing campaigns to stand out from competing schemes.
There seems to be a flurry of constant statistical and economic detail regarding the UK housing market, whilst although saying different things, all point to one major fact, a shortfall in affordable housing. The term affordable housing perhaps has changed in modern times. It does not necessarily mean governmental schemes or social housing for those on low income, more so general housing that is simply affordable for the nation to get on to the property ladder. Various schemes under the governments ‘Help To Buy’ initiative – ‘First buy equity loans’ and ‘Shared ownership’ are just some of the ways the government has tackled this so called issue, but even though this may be helping, the UK is inevitably short of available properties.
The government has made various announcements. Last month they set a target of building 1 Million homes by 2020 with the current housing minister Gavin Barwell stating ‘We need to do better’ as only 150,000-170,000 homes are being built each year. Even though the average requirement being 200,000 homes per year, analysts still believe the shortfall is greater due to the current demand being set at around 300,000.
Last week the Chancellor, Philip Hammond, in his Autumn Statement said £3.7billion would be allocated to building more than 140,000 homes across the UK. The government has also agreed to spend £1.4billion on affordable housing and this could lead to 40,000 more affordable homes being built.
With the clear message that there is a lack of available housing what are the other identifiable facts that also point to the rise within the residential market over the coming years and also its effect within the North West.
Scarcity Of Land For Development:
One of the major issues is where to build the required housing to keep up with the demand for residential homes. Land is becoming less readily available and there is an increased pressure by a number of committees such as various developers and the GMCA (Greater Manchester Combined Authority). The GMCA are working alongside Greater Manchester’s 10 local planning authorities to identify the right land within the right places so that homes, jobs and the required infrastructure can be delivered up to 2035. The overall reaction to their housing master plan, the GMSF (Greater Manchester Spatial Framework), has focused on the proposed release of 3% of the city-region’s Green Belt area. With the added pressure also coming from developers the government looks set to give way to release more protected Green Belt zones to ease the pressure of demand and control the required supply for residential housing.
Economic Climate & Foreign Investment:
One of the more pivotal issues has been the recent Brexit movement that resulted in a fall in the GBP. Whilst this fall has put a strain on the UK economy, it has increased demand and value within the UK property market. The Royal Institute of Chartered Surveyors back in October 2016 declared that ‘House prices rose at the fastest rate in seven months and it will continue to rise over the next 3 months as a result of a dire shortage of homes for sale’.
Lets not also forget the flurry of overseas institutional companies, funds as well as sole investment from buyers in China, USA and other countries that has resulted in a demand for good quality robust properties. Whilst the GBP is weak there has never been a better time for overseas investment to buy within the UK. Chancellor Phillip Hammond presented a proposal of a 13-scheme Northern Powerhouse portfolio to Chinese vice-premier Ma Ka part of the UK-China Economic & Financial dialogue. A £5Billion foreign investment has been outlined for projects within the North, with seven of them earmarked within the North Western regions.
New Generation Rent:
The Private Rented sector (PRS) or Build to Rent sector has had much press lately due to the fact that even though further housing is required not everyone may be able to afford getting onto the property ladder. As mentioned there have been various incentives and schemes to help first time buyers, but this does not initially solve the problem. A clear indicator is the fact that home ownership is the lowest it has been in 30 years. The introduction of developments where housing is purposely built for rent and not for sale has been greatly received not only by developers but also politicians and financiers. Heath Thomas the head of Real Estate Finance North West at NatWest, recently said that ‘The government needed to provide more clarity on how it would meet house building targets. An emphasis on low cost homes to rent would offer an alternative to those requiring houses who are not able to support a deposited finance structure or credit availability and also counter act against the shortfall of residential housing’.
The UK is entering unchartered territory. A clear shortfall in housing has been clearly identified. A high investment from overseas is inevitable. Pressure of utilising various Green Belt Zones for development and offering not only deposit structured support for house buyers but also facilitated rental only schemes, have illustrated the dynamic thinking to ease the pressure of the demand for housing. It is also important to consider whilst some of the major UK house builders may be capitalising on this trend lets not forget the rest of the market. With an abundance of smaller projects coming out of the woodwork, potential smaller property businesses will thrive from the current trend hitting our UK property market – Great Britain its time to deliver !