The UK housing market has had its fair share of ups and downs, with this year alone acting as a microcosm of what can go right and wrong in the world of property. Despite the fallout from Brexit and the Covid pandemic, the property landscape managed to stay in rude health. But that doesn’t mean it’s without trouble.
Property developers are currently experiencing the trials and tribulations of the sales market first hand. Selling new-build homes is proving difficult, with overseas investors pulling back as a result of the Covid pandemic and domestic buyers struggling to meet the high premiums that new homes command.
In London, the problem is heightened: July and August saw sales in the capital’s prime areas down by 24 per cent from the previous 12 months. The stamp duty holiday helped atone for some of the property market, but the cut-off of £500,000 doesn’t really help buyers purchasing homes that are priced higher than the stamp duty threshold.
This has left developers in a bind, with them exploring other options to make their new-build developments more appealing. Incentives such as free furniture and even cars haven’t done enough to bring overseas investors back to the market. London could see a growing number of empty ghost towers as a result.
Therefore, developers need to explore alternatives to ensure they don’t take a loss on their units. One way of doing this is through the rental market, which is currently seeing record numbers of demand. By renting out new units, developers effectively become large-scale landlords and receive a steady stream of rental income.
But turning developments built for the sales market into rental homes isn’t straightforward – though it is possible with the right teams in place. The opportunity is there, and we’ve covered it in more detail in our latest white paper, How The Sales Market has Affected Developers (And What They Can Do to Outsmart It).
In this white paper, you will learn:
- The problem – how an unpredictable sales market has caused issues for developers
- The impact – the current landscape that developers face with new-build properties
- The solution – how the rental market can mitigate short-term issues while helping with long-term gains
Download the white paper, and get the lowdown on how the sales market has affected developers and what they can do to outsmart it.