Property predictions – what the industry thinks will happen in 2017 (part 1)

Today, we start our series of articles looking at some of the predictions from the housing industry’s top professionals, looking at a host of aspects of our property market.

Stewart Baseley, Home Builders Federation (HBF) executive chairman: “Output has increased significantly over the past three years with housing supply up 52%. This has been on the back of an improved economy and more favourable policy environment as a result of the commitment of successive governments to build more homes. Help to Buy has in particular assisted previously beleaguered first time buyers but has driven demand generally and so allowed builders to increase output with more certainty. And whilst the planning system is still too slow and bureaucratic, there has been an increase in the number of permissions granted as a result of improvements. Whilst the big increases in simply are positive for the country – both from a social and economic perspective – we are still some way short of matching housing supply to demand. However, as long as there is economic and political stability and the government continues to develop a framework within which the industry can operate, output should continue to increase and we should see more homes of all types and sizes delivered.”

Jonathan Layzell, Stonewater executive director of development: “When one in three people in the country can’t afford to buy a home, we’re delighted to see the new housing minister committing to a mixed housebuilding programme that will create homes for both sale and rent. This is a step-change in the government’s previous housing strategy which has been focused on homeownership.  It's a step-change welcomed by Stonewater. The Chancellor’s recent announcements about additional and more flexible funding for housing associations is also an acknowledgement that affordable housing providers like us, which are focussed on building homes across a range of tenures including homes for rent as well as for sale, can continue to deliver even during periods of uncertainty in the sale market.”

Phillip Arnold, managing director of Phillip Arnold Auctions: “London will remain the place to for investment property and hotspots are already emerging around the Crossrail stations. But good rental yields are being seen in places like Leeds, Manchester and Luton. I suppose it depends on what the purchaser is going to do with the property – renovate and sell, rent it out or live in it themselves. However, with a London property now costing on average 14.2 times a person's annual income, there could be an exodus out of the capital unless Sadiq Khan can get more affordable houses built soon.”

Mike Kirkham, head of commercial and agricultural property at Vincents Solicitors: “One of the most difficult things for housebuilders to deal with is the disparity of approach between the different local authorities. In my area of Chorley, we have an extremely positive and proactive authority which is open to inward investment, both commercial and residential, and has a reputation as being good to work with by housebuilders. The result is the authority is streets ahead of others when it comes to meeting targets, bringing more jobs and opportunities- and ultimately more money- into the area. There are other authorities whose default position is to fight development at every turn, which is costing their taxpayers hundreds of thousands of pounds a year and prolonging the pain for generation rent who continue to be unable to buy homes near to where they grew up. A stronger guiding hand from central government may be the only way to get these targets met and keep land values at realistic levels.”

Helen Hick, joint managing director of Larkfleet Homes: “The new housing market is driven by consumer confidence. If people are feeling optimistic about their own financial position and their future prospects then they will be willing to take on mortgages and the other expenses of moving house. So the market is critically dependent upon wider economic circumstances over which, as an industry, we have no control. Consumer confidence seems to have been largely unaffected by worries about Brexit. At present, forecasts for the economy and consumer spending all look good for 2017 so we – like consumers - remain optimistic. We were pleased to see the government’s commitments to supporting the new housing market that were made in the Chancellor’s Autumn Statement. It remains to be seen how much of this rhetoric is translated into action.”

Chris Endsor, chief executive of Miller Homes: “Our focus for 2017 will continue to be on providing high quality family housing in locations with good local amenities. We expect the regional markets where we operate in England, which are all outside of London, and in the Central Belt of Scotland to be robust with confidence remaining high due to high employment levels, low mortgage rates and good affordability. In my view the wider industry is stepping up to the plate to deliver more new homes in order to meet demand and government target and therefore I do believe 200,000 new homes per annum is possible. The main challenge, however, will be gaining enough implementable planning permissions as the planning process remains inefficient, too lengthy and under resourced in many local authorities.  If we are to increase volume it is vital that the government addresses this issue, permitting enough new outlets to drive the growth required.”

Spencer Botchin, director of Sandfords, Marylebone and Regent's Park area: “I have friends in American who are university professors seriously considering leaving to come and live in England. Having heard the sentiments of other Americans I’m sure they aren’t alone. Going into next year, we are expecting to see more of the same with people sitting on their hands, particularly foreign buyers who’ve been waiting to see if the pound falls even further. I don’t believe that it will, we are now there or thereabouts and it’s time for them to start buying again. Buyers are just beginning to come into the marketplace for one reason or another, quite a few of them have been Indian buyers who are keen on spending their money buying additional homes in London. People have always got to buy and sell. Once the uncertainty lifts we will hopefully have a clearer path and everyone can get on with their lives.”

Catch up with all the 2017 prediction articles here:

Predictions Part 2

Predictions Part 3

Predictions Part 4

Predictions Part 5