Property predictions– what the industry thinks will happen in 2017 (part 3)

As the New Year approaches, we take a look at yet more predictions from senior figures across the UK’s residential property market for their thoughts on what will happen to the housing market in the coming 12 months.

Melanie Omirou, group managing director of Acorn Property Group: “Housebuilders are not going to meet government targets for new homes next year, though they’ll start as many as they can with permissions. The planning system favours large sites in green fields but we should be building in urban areas on brownfield, backed up by plans which ignore NIMBYism and respond only to genuine planning concerns. We also need to communicate the cost savings and the health benefits of new houses. Without family support, it will still be very difficult for first-time buyers, but they are better off than second-time buyers as they are given support. Upsizers are still in difficulties after a certain point, with SDLT charges and the extra 3% for crossover buyers.”

Giles Lawton, head of Strutt & Parker, Oxford: “In the Autumn Statement, the government announced the £110m funding for an East-West rail link between Oxford and Cambridge, going through places like Milton Keynes and Bedford, and ending up at Norwich. This can only be good news; reinstalling the Varsity train line between two world-leading university cities would undoubtedly forge even closer links. This would be especially important to the burgeoning commercial partnerships that both institutions are developing. The highly competitive world of scientific research is increasingly allied to Universities and this rail link may be key to the UK competing with the US and Far East. There would also be the commercial benefit for tourists being able to travel much more efficiently between the centres, currently an approximate five-hour coach journey or a three-hour train ride. Infrastructure changes to the city remain important to the overall health of the property market; they make fluctuations in the market feel less exaggerated creating a safe heaven. Investment to our road and rail networks all help to generate a sense of things happening and evolving, making the city an exciting place to be right now.”

Jake Russell, director at estate agent Russell Simpson: “Much like 2014, 2015 and 2016 - the UK will begin the New Year with an opaque and uncertain future ahead. As with the Scottish Referendum, the General Election and the EU Referendum; the forthcoming year will be dominated by yet another landmark political event in the triggering of Article 50. As with any trading market, uncertainty breeds caution and indecision, and as such we can expect continued low levels of activity. Overshadowing this, however, is the toxic and destructive levels of Stamp Duty Land Tax, which must be reconsidered by the government. Ultimately, it will be our job to bring clarity to the confusion that exists in the marketplace, and to provide solutions that suit each individual case.”

Henry Smith, CEO of Aitch Group: “Build-to-rent has really taken off in the last year and this sector’s growth is not going to stop any time soon – we announced a 12-scheme [private rented sector] PRS pipeline across London earlier this year. All over the country people have seen the benefits of PRS as the market becomes more open and innovative. The government has made all the right noises recently, showing that they are more flexible in their attitude to the build-to-rent model. With the crackdown on buy-to-let showing no sign of ending, the government is clearly looking to PRS to address the housing crisis in London. Legal and General’s build-to-rent fund passed £1bn [last] week and the government has recently announced a further £400m investment in the sector. It is these huge signs of confidence from key decision makers that will ensure that the UK’s built-to-rent wave goes from strength to strength next year.” 

David O’Reilly, acting managing director at residential property developer Story Homes NW, says: “We believe it’s essential that any planning application is compiled following thorough research of the area’s requirements and any challenges that may arise throughout the construction phase. It’s only with this understanding that we can then make a submission and be confident that it will be granted permission. There are too many applications with too many conditions attached, particularly pre commencement conditions. Consultation with the public and local authorities can reduce the number of conditions when all parties take a pragmatic view. We work very hard to ensure site commencement is not delayed but it is a challenge that requires all parties to work together to find solutions to issues raised.

James Greenwood of Stacks Property Search: “The market for large country houses with 6+ bedrooms and 10-40 acres will stagnate. Nobody wants the responsibility or the cost. The holy grail of country property will be edge-of-village, with ancillary accommodation, up to three acres of land, and near a good market town with interesting community and good commuting.”

Andrew Biggs, land and new homes manager for Marchand Petit: “The current housing target for new builds following a recent Lords report needs to be at 300,000 new builds per year an increase of 50% on existing targets. This a huge increase and one that will be very difficult for housebuilders to meet not only due to the rather complex and stifled planning system that currently exists but also due to land availability, and publicly owned land needs to be released for housebuilding if targets are ever going to be met.”

Daniel Kershaw, director at Russell Homes: “We are finding the biggest hurdle to delivery is securing planning applications within reasonable timescales. Planning authorities appear more under-resourced than ever, thus delaying plan preparation and determination of applications. While the majority of authorities, their officers and council members, understand the need to boost housing supply and actively support delivery, officers inform of unrealistic workloads as a primary reason for delays to determination. Until the government invests properly in planning departments, increasing the numbers of experienced staff, then the policy changes that promote house building and respond to critical national housing shortage and affordability issues, cannot be implemented at the pace needed. Currently this disconnect between the government’s pro-development agenda and what is happening on the ground needs to be resolved.”

Catch up with all the 2017 prediction articles here:

Predictions Part 1

Predictions Part 2

Predictions Part 4

Predictions Part 5