• The key annual Conference for the London Resi Market returns on 6th March....
  • Join hundreds of delegates from both Private & Public Sectors at the Affordable Housing Conference on 19th March....
  • The Market Leaders in Student Housing from across the Uk, Europe & Globally gather in London on 14th May

Events Diary

Student Housing 2019

Tuesday 14th May 2019

Resi Development & Site Finding 2019

Tuesday 21st May 2019

latest news

Trends and opportunities in UK student housing development

The provision of student housing in the UK is currently the highest in Europe, with 27% of all students able to be accommodated. Despite higher levels of supply, the UK market is still a lucrative one for investors. We’re looking at where the current opportunities are for investment, the trends affecting demand and how external factors could influence the sector.

Regional property trends 2019

It’s an interesting time for the UK property market. Despite political and economic uncertainty leaving mainstream buyers waiting to see how the year pans out, reluctant to buy or sell unless they have little choice, it’s not all as doom and gloom as some would have us believe. We’ve examined some of the key regional property trends for 2019.

How is residential development changing in London?

After a peak in mid-2017, the London Residential property market is facing strain as low affordability and falling house prices contribute to a slow decline. A recent sales report by Molior London found that, removing Build to Rent figures from the picture, the London new homes market sold fewer units in the inner-city area in 2018 than every year since 2012. With these statistics in mind, we’re taking a look at how residential development in London continues to change.

UK risks losing a generation of property SMEs

4 out of 5 SME housebuilders in the UK have disappeared from the market since the last property boom, according to the LendInvest report Starting Small To Build More Homes earlier this year.

The government has been urged to empower SME property firms to bring their share of market output up from just 12.5% today to a pre-90’s high of 37%, or risk losing “a generation of property entrepreneurs.” Making good on its aims set in the Housing White Paper to diversify the UK property market is now vital, says the Federation of Master Builders (FMB), which has published its annual House Builders’ Survey.

SME output vs. large building firms:

 

Key structural barriers for SMEs

The provision of new homes built by SME firms (building fewer than 500 units per year) in 2016 fell below a quarter of market output for the first time ever, says the FMB.  

Its report highlights key constraints on supply, some of which have accumulated over several years:

  • Lack of available land: Viable sites for construction was the most commonly cited barrier (62% of its 124 respondents). 54% claimed that the number of small sites opportunities is decreasing
  • Lack of access to finance: When asked to rate current lending conditions for SMEs on a scale of 0 to 5, the average score was just 1.63
  • The planning system: Respondents rated inadequate resourcing of planning departments as the most significant cause of delays in the planning application process for the second year in a row
  • Access to skilled Labour: 35% said they employ EU workers, while 33% believe that the ending of free movement after Brexit will negatively impact their businesses
  • Developer obligations: 49% of respondents have rejected a small site opportunity because Section 106, Community Infrastructure Levy (CIL) or other obligations made the project unviable
  • Just 3% of all respondents claimed to have no restraints.

Scepticism toward finance options and pulling out of the EU without a transition deal are just two concerns voiced by a sector that once built nearly 40% of our homes. 

Related:

Collectivism and community in the property market

The evolution of UK residential development funding

Solutions

The House Builders’ Survey effectively drills down into the most important causes of each house building barrier. The findings provide a simple but comprehensive breakdown of what ought to be addressed and in which order.

The government is currently in the process of tackling the three main structural barriers: land, planning and finance. It is hoped that key policies outlined in the Housing White Paper, notably the targeting of part of the £3bn Home Building Fund at SME builders and the rollout of a more streamlined planning route for smaller sites through the new Permission in Principle, will be implemented effectively - sooner rather than later.

As we mentioned at the beginning of the piece, LendInvest, a leading lender for property professionals, has placed itself at the forefront of a campaign to grow the SME sector. Its new blueprint, Starting Small To Build More Homes, pulled together industry evidence for the first time to examine the root causes of decline in the property SME sector and what more can be done to reverse its fortunes. It came just a few months before its academy for small-scale developers received industry backing.

All sides of the industry, from tech firms and government MPs like Communities and Local Government Secretary Sajid Javid to the financial sector and enterprise schemes, must now sing from the same hymn sheet if property entrepreneurs are to be given the same opportunities afforded to others in alternative sectors. Giving property entrepreneurs greater access to the Enterprise Investment Scheme and local Enterprise Zones are just two actions that can be taken now.

Maximising Britain’s residential investment potential

This October, leading investors and developers will examine innovations and opportunities in the residential sector at our Residential Investment Conference on 28th October. Given the mismatch between demand and supply for housing, creating sizeable opportunities for small builders and entrepreneurs is crucial.

Businesses like LendInvest will be using property conferences this year to organise the industry and find solutions to this growing problem. There is a sense that the residential property industry is on the cusp of change in so many ways; it is now crucial that entrepreneurship is included in Britain’s next housing chapter.

To book your seat at Residential Investment 2017, visit our online booking page. Our panellists this year include Chief Executives from Hyde Group, Get Living London and LCP.

 

 

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Posted: 05/10/2017
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