Building homes the smart way

Words by Andrew Stoddart - Vida Architecture Words by Andrew Stoddart - Vida Architecture

It has been reported that 250,000 new homes need to be built per year to keep up with demand however this is simply not happening.

Andrew Stoddart

Andrew Stoddart

With the economic downturn of the early 2000's the construction industry struggled to recover however with the governments help with low interest rates, help –to-buy and the review of planning guidelines it is now back on track.

Before Christmas it was reported that there were 10 buyers for every home which is why there has been a rise in property prices during the last 6 months and no sooner properties are going up for sale they are sold, very much like before the crash.

Mark Hayward, managing director of NAEA, said: "Supply is outweighing demand so heavily now that it can't solely be attributed to seasonality. It's clear that we're faced with a crisis here: the housing market needs addressing as a matter of urgency. If we don't act now, this will impact first-time buyers, second steppers and last steppers, forcing many out of home ownership. It's all very well planning to build houses, but we need to move to action and get and the bricks and mortar on the ground, if we're to solve the crisis we're faced with."

Although there is more building (although still falling dramatically short of what is required) many of the developers who have been sitting on the land ready for the financial market to improve are looking for the best return meaning that the houses that are being built are the bigger family homes rather than focusing on the demand of first time buyers, causing a bottle neck in the market.  

Rightmove has already labelled 2016 as the year of the first time buyer so surely the logical step would be to provide more properties for that market? The housing ladder has to move at the bottom before it can move at the top so why not use the land you have to kick start the chain?

The worry a lot of developers have is that with the introduction of the new taxes buy-to-let investors will decrease the demand for smaller properties as initial deposits are still a huge burden for the FTB. The truth is there are buyers desperate to get that first foot on the ladder, those people who have saved over the last 10 years as well as the introduction of help from the government means that smaller houses are getting snapped up.

The other concern is that by building smaller houses there is a lower return on your investment, the counter argument to that is simple – supply and demand. By building bigger houses they may take longer to sell meaning your return may be more however it will take longer to get to you. If you have the right architect you can utilise the land you have and build more properties that will sell quickly putting money in your pocket.

My advice to anyone who has land or is thinking of buying land? Focus on building what is needed, make sure you utilise the combination of space with the type of property that the buyers are looking for and you will find a quick and profitable return.

Andrew Stoddart is the Managing Director at Vida Architecture. For more information please visit www.vida-architecture.com