One-on-one interview: Ben Morris, head of new homes, Colliers International
Marc Da Silva continues his ongoing series of interview with senior figures within the UK housing industry by posing the questions to Ben Morris, head of new homes at major estate agency Colliers International.
Where in the UK does your firm sell new homes?
Colliers International is headquartered in the West End of London, and our new homes division sells residential property throughout Greater London. Our office is designed with a ground floor client lounge that doubles as a sales suite, showcasing development models and marketing literature on schemes we are appointed to sell. This enables buyers to drop by and discuss potential investment opportunities or new home requirements over a coffee. We also regularly host new development launches and new phase releases at our HQ.
What types of new build properties is Colliers International currently selling?
Colliers market new homes that are six to 24 months off-plan. Most of our developments are inside the M25 with prices starting from £250,000. Many buyers start their search in Zones 1 and 2 but with transport infrastructure improvements, more buyers are pushing out to Zones 3 to 6, seeking more space or better property specifications.
Have you noticed any particular buying trends recently?
There has been a noticeable pickup across the board on the back of the election. At one end of the spectrum, first-time buyers can plan ahead by securing an off-plan property 12-18 months before build completion. The long-stop completion allows them to get on the ladder today but top up their deposits whilst the property is being built.
The buy-to-let market is even stronger with investors turning to bricks and mortar as a safe investment for their money. The liquidity in mortgage products has allowed homeowners to refinance and buy a flat either as an investment or for their children. Parents are getting increasingly nervous that their offspring will struggle to get on the housing ladder and are sometimes planning ahead by 10 to 20 years in advance.
The London tenant market is growing from strength to strength not only because the capital has a transient population, particularly from international professionals, but because the average age of a first-time buyer is getting older. Strict mortgage criteria, stagnant real wage growth, minimal interest on savings and rising property values means people are renting for longer periods. These conditions are assisting buy-to-let landlords who are benefiting from low interest rates and strong rental growth, meaning a property investment is outscoring other asset classes with yields ranging from 3-4.5% for central London and as high as 4.5-6% in outer London zones. As an area improves, so do the yields – it’s all about timing.
Why should more buyers consider buying a new build home as opposed to older property?
New build properties require minimal maintenance, have all new fixtures and fittings, can come with new white goods included, typically have good after sales care of up to two years, offer new service charges which require no major works or large sinking fund requirements and have lower lump-sum initial payments than older stock meaning buyers can secure a property and top-up their deposits while waiting for their home to be built. New build properties also provide Help to Buy options, allowing first-time buyers to ‘staircase’ over time. Another big advantage is the building warranty which guarantees the fabric of the building for 10 years.
Is it worth buying property during the off-plan stage of construction?
Absolutely it is. We are in a rising market so securing a property at today’s price means buyers could potentially save thousands compared to build-complete properties. Buying off-plan also gives buyers time to top up their deposits so that they can benefit from lower mortgage repayments.
What’s your property market prediction for the rest of 2015?
Values will continue to rise throughout Greater London during the remainder of the year. We have already seen values increase along the Crossrail corridor and no doubt this trend will continue as suburban areas become more accessible to central London. You don’t have to buy on Crossrail though. There are some great opportunities south of the river with quick links into town using over ground rail services, which are often overlooked by buyers. There are some interesting regeneration projects in centres that have great public transport networks and I think these will benefit just as well as the more widely publicised growth areas.
From a wider perspective, we can expect to see the typical summer lull and there are a number of new launches earmarked for September. My recommendation would be to take advantage of the summer slowdown and get a deal now.
Which current new build developments that Colliers International markets do you think stands the best chance of winning a WhatHouse? Award?
Morello in East Croydon is a fantastic scheme for homebuyers and investors alike. It is in the heart of a major regeneration project that will shortly benefit from new social and commercial infrastructure, such as the rejuvenation of the Westfield/Hammersmith shopping centre. It is on the doorstep of the East Croydon National Rail station, providing a 20-minute commute to either London Bridge or Victoria. Residents will benefit from a private gym and a concierge and with one-bedroom flats starting at £306,000, values can only go one way.