Posted 17 December 2015 by Keith Osborne
Our interview series continues, this week turning the attention to the ‘Northern Powerhouse’ region, to get some insight on the new homes market from Michaela Lancaster, sales director at Barratt Homes Manchester.
Michaela, can you please tell us about your role - what areas you cover and where Barratt is operating?
My role is to head up all the sales and marketing activity for Barratt Manchester, which covers more or less the whole of the North West including Cheshire (eg Elworth Gardens), Merseyside (eg Delph Wood), Lancashire (eg Knights Wood) and Greater Manchester (eg St James’ Place), encompassing 26 sites.
I also sit on the Barratt Manchester board of directors, which enables me to influence strategy and direction at the highest level – a very exciting and challenging position, and one which I absolutely relish. I actively champion and nurture female talent in the industry, and am keen on getting involved with schools during 2016 to try to attract more young women into construction.
How has the market been in 2015 - have you seen any buying trends?
The market throughout 2015 was strong for Barratt Homes. We saw a reduction in stamp duty and the continuation of Help to Buy, which when combined with continued low interest rates, really helped momentum. The introduction of the Help to Buy ISA on 1 December is also really good news for buyers.
Here in the North West, we continue to see a growing demand for family homes in popular residential areas where schools are good and transport links are accessible. The trend for a more open-plan downstairs living area is also increasing, with customers valuing high-quality kitchens with plenty of space to sit down and eat, do homework, watch TV etc.
What are your strongest sites right now?
Developments with a great mix of homes, careful consideration to layouts and strong kerb appeal will always sell well. We currently have a great selection of developments which really do tick all those boxes in the North West, so across the board, demand is high.
Do you find many of your customers are only interested in new build homes?
Our customers do tend to favour new build homes, yes, so our competitors are usually other housebuilders rather than the second-hand market.
Many buyers these days simply don’t want the hassle of an older home, and love the ‘blank canvas’ aspect of buying brand new. They have also done their homework and realise that maintenance costs in a new home are much lower than in older properties, as are the utility bills and energy saving initiatives.
Do those unsure about buying new or re-sale homes need much persuasion?
In my experience, unless a buyer is dead set on a traditional period property, the benefits of buying a new home with all the assurances and convenience that brings is very persuasive.
Does Help to Buy continue to be popular with Barratt purchasers?
About 40% of our buyers purchase their home with Help to Buy, so yes, the scheme is very important to our customers. Affordability is still a real issue – even for those on higher incomes – and the help towards a deposit is essential, especially for first-time buyers. We also see more and more customers using the scheme after a relationship split, who have substantial equity to buy but maybe not quite enough to purchase the home they have their hearts set on.
Do your investor customers tend to be local, or do you get strong interest from people elsewhere in the UK?
The majority of customers who buy from us are local and purchase their homes as their sole, primary residence, although of course we do attract a small number of investors too.
Our show home leaseback product is particularly attractive to investors; we offer our show homes for sale, which we then lease back from the buyer until we’ve completed sales on the development. This gives the buyer a guaranteed rental yield of 6% per annum, and of course, on some of our very large developments releases in stages, this can span several years.
Will the government's ‘Northern Powerhouse’ initiative have a positive effect on the new homes market?
The Northern Powerhouse master plan is certainly very exciting for this region, although there are still issues such as planning obstacles which prevent housebuilders delivering the volume of homes needed to address the shortage of desirable, high-quality homes we desperately need. The opportunity is huge though, and at Barratt we relish the challenge of building homes which will simultaneously keep people and businesses in the region and also attract new talent from outside.
What's in the pipeline for 2016 and how do you think the market will go next year in your region?
Barratt Manchester will continue its dynamic and proactive investment in land acquisition during 2016, which will also see us extending our reach into some areas we have not built in before. The North West is an incredibly buoyant place to live and work right now – and this is reflected in demand for quality homes. These are exciting times for us and 2016 is set to be a busy year. Watch this space for details!