Glen Mitton's blog

Last property news of 2011

2011-12-23T01:58:00.000-08:00

The Financial Services Authority has published its proposals on the mortgage lending reforms. The plans are aimed at restricting 'risky' lending, whereby applicants will face a more thorough assessment process, thus avoiding borrowing more than they can afford. The hope in implementing these new rules will be to avoid the return of the gung-ho attitude of lenders before the credit crunch.
In other news, research by Zoopla has revealed that 26,744 new British property millionaires were created in 2011. This demonstrates the existence of a two-tier market, as the average value of a British home fell by three per cent between 2010 and 2011. Elsewhere, the number of new home approvals has also fallen, despite a YouGov opinion poll showing strong support for building more properties. Planning for 133,346 homes was approved, which is a fall of 10 per cent on the year before.
And finally, as another challenging year for the property market draws to a close, we would like to wish you a very merry Christmas and a prosperous new year. Click here to view your MMS Christmas card and here for more details on the stories behind the news this week.

What's in the property news this week?

2011-10-14T05:40:00.000-07:00

The Home Builders Federation (HBF) has waded into the argument over the Government's proposed planning reforms, supporting the need for a change to law and warning that a generation could face a 'house building ice age' if the changes don't go through.

Elsewhere, homeless charity Shelter has claimed that private rents are 'unaffordable' in more than half of local authority districts in England. Just 12 per cent of areas were considered to be affordable, with rent accounting for less than a third of take-home wages. Despite this the rental sector continues to be buoyant, possibly because the odds are stacked against first time buyers, the numbers of which have fallen to the lowest level in almost a year. This is being attributed to the lack of lenders willing to provide a mortgage to buyers with small deposits.

And finally, when you buy a second hand property most people expect the need to keep some money aside for updates, but £10m is more than just a few pennies. Well that's how much the new owner of a £75m mansion in Kensington will have to pay, as the home has laid empty for 10 years. Mind you, if you have £75m to spend on a property, what's £10m more?

Click for the full stories.

The week's top property news

2011-09-16T06:09:00.000-07:00

It's been a week of ups and downs for the property market. A movement against the proposed planning reforms seems to be gaining momentum. The Daily Telegraph has put its weight behind the 'Hands Off Our Land' campaign, which claims that developers are sitting on vast land banks with planning permission for new homes, negating the need for any 'watering down' of the planning laws.

The Royal Institute of British Architects has said that many new properties are "shameful shoebox homes". Its study found that the average two-storey three-bedroom property was 86 sq ft too small, but the House Builders Federation has responded by saying larger homes could prove to be unaffordable. On a more positive note, a number of developers, including Barratt Homes and MMS client, Galliford Try, have released positive results, with Barratt posting its first profit in three years.

And finally, rents in the London property market have surged to epic proportions, almost doubling in the last year. Rents have reached a record £55,000 per week, with homes in Knightsbridge commanding the highest yields.

Click here for full details.

What's in the property news this week?

2011-08-26T10:34:00.000-07:00

Halifax has stated this week that Low Cost Home Ownership Schemes (LCHO) are a vital part of the housing market, helping to get buyers with affordability issues onto the property ladder. In particular, shared ownership and shared equity are the most popular incentives, accounting for 87% of total sector transactions.
Persimmon has seen an increase in house sales, despite the usually slow summer season. Mike Farley, chief executive, feels as if the market is more stable, thanks to better mortgage availability and low interest rates. In other news, there are many things we look for when buying a new home, but it comes as no surprise that a good school catchment area is a high priority for families. Indeed, it was top for 37 per cent of house hunters with a child aged 10 or under, with many willing to pay an extra £12,000 to secure the property.
And finally, the average age of a first time buyer, which is currently 35, has risen by eight years since the 1960s and over half of respondents surveyed by Post Office Mortgages feel that they will never be able to afford to get on to the property ladder.
Click for more details

What's new in property news

2011-08-05T05:41:00.000-07:00

Surely a frustration for house builders is how ill prepared buyers seem to be and new research released this week appears to back this up. Halifax has found that just 14 per cent of non-homeowners are saving for a deposit, while only a third of respondents have a realistic plan to purchase in the next five years.

Elsewhere, renters who want to take their first step onto the property ladder may have reason to hope, as one building society is offering to take their rental payment history as evidence that they can afford a mortgage. In other news, anyone wanting a home in one of Britain's idyllic national parks will have to fork out, on average, an extra £100,000 - that's a high price for beauty.

And finally, move over One Hyde Park! There's a new development looking to take over the crown of 'most elite London address' and that's The Glebe in Chelsea. Residents can expect their own private pool and lift and competition will surely be rife for the most exclusive homes, with one penthouse and two luxury villas available!

Click here for the stories behind the headlines

The week's leading property news

2011-07-22T09:52:00.000-07:00

This week, the chief economist of the Organisation for Economic Co-operation and Development has suggested that Britain implements a property tax based on market values, replacing the likes of stamp duty and bringing in more money. However, although considered revolutionary by leading accountants, they expect it would prove unpopular due to the negative effects on house prices.

In other news, first time buyers have a better chance of climbing the property ladder thanks to the high number of mortgage products available in the market for those with a ten per cent deposit. Elsewhere, news for renters is not so rosy, as figures released by LSL Property Services' Buy-to-Let Index show that the average monthly rental property in England and Wales exceeded the £700 barrier for the first time.

And finally, Barclays may have just started a price war between lenders, as it has launched its cheapest mortgage deal in 15 years. The reduction in rates is the bank's sixth consecutive cut, which experts believe will lead to competitors doing the same.

To read more, click here.

Top Property News

2011-06-24T06:36:00.000-07:00

It's good news for first time buyers this week, as the Government has launched a new equity scheme, FirstBuy, whereby house hunters will only have to raise a deposit of 5 per cent for a 75 per cent mortgage. The Government and housebuilder will offer a loan of up to 20 per cent, boosting the purchaser's chance of getting a foot onto the property ladder.

According to Rightmove, house prices have risen for the sixth consecutive month, up to £240,394, which equates to a 0.6 per cent month-on-month increase and a 1.3 per cent year-on-year rise. However, forecasting shows the second half of the year is unlikely to be so positive. Elsewhere, research has found that homeowners in the best performing economic areas of the UK have seen the price of their property rise by almost £150,000 over a decade. The East London areas of Canary Wharf and Docklands come out on top. Eight out of ten areas with the lowest levels of economic activity were in Wales and the North West.

And finally, savvy homeowners are renting a room out to lodgers in a bid to earn some extra money. One in ten householders currently does so, the combined efforts of which are worth £3.9 billion a year in payments, averaging out at £182 per month.

Click here for the full stories behind the news.

What's hot in the property world this week

2011-06-10T07:57:00.000-07:00

This week the government announced plans to release public land for sale to house builders in the hope of creating up to 100,000 new homes and 25,000 jobs by 2015. This will help to address the current shortage of housing and a new map of land and buildings in each area will be unveiled later this year.
According to Halifax's house price index, prices rose by 0.1% in May compared with April, although they are 4.2% lower than this time last year – the biggest annual drop since October 2009. The future looks bright however as the bank has predicted the slight improvement in the economy and low interest rates will help the market. In other news, fixed mortgage rates are at a six month low. This mainly stems from competition amongst lenders, as homeowners look to take advantage of low interest rates by fixing their mortgage before a hike.
And finally, the UK's most expensive home outside London has gone on sale for £75 million. No surprise that it's located in neighbouring Surrey; Updown Court boasts 103 rooms, five swimming pools, two penthouse apartments and a helipad and is currently owned by a property development tycoon; anyone we know, I wonder?
Click for more...

Round-up of top property news w/e 3 June

2011-06-06T01:27:00.000-07:00

Last week the extent to which house builders have been supporting first time buyers was revealed. The likes of Taylor Wimpey, Persimmon and Barratt have ploughed almost £1billion into shared equity schemes to help those struggling to buy a home, which has resulted in 28,000 sales.

In other news, the Centre for Economics and Business Research (CEBR) predicted that house prices could rise by almost 16 per cent by 2015, although they will continue to fall for the rest of 2011. The positive from this is that banks could see improvements to their balance sheets meaning strict lending criteria would be loosened. Elsewhere, it seems not everyone is so keen to jump on the digital bandwagon, including property letting agents, of which 90 per cent admit that technology could improve their service, but they are reluctant to invest the money.

And finally, there's no doubt estate agents need to be cunning when trying to secure a sale, but describing one £3.6 million property in County Durham as having countryside views, while neglecting to mention the gasworks and scrapyard next door is taking it a bit too far!
Click here for all the details.

In the property news this week

2011-05-27T10:53:00.000-07:00

Good news and bad news this week as a survey by estate agent Your Move has found that eight out of ten home owners think house prices will rise over the next five years. The bad news is that owners expect prices to increase by just 6.9 per cent over that time, much less than the 10.6 per cent they predicted a year ago.

The Knight Frank Land Index for the first quarter of 2011 has revealed, perhaps not surprisingly, that developers are concentrating their efforts on buying land that will appeal to families, in central locations and have planning already in place. Elsewhere, analysts are warning that if interest rates rise to as high as 5 per cent, as some are suggesting, mortgage payments could increase to an average of 51 per cent of take home pay.

And finally, it's no longer just the supermodels of New York that can be accused of being super thin, it's the homes too! That's because the Big Apple's skinniest property, at just 9.5ft wide, has gone on the market for $4.3m. Breathe in!

Click here for all the details.

The week's top property news

2011-05-20T06:49:00.000-07:00

In the first quarter of 2011, the number of new homes started has jumped by 26 per cent, showing a slight recovery in the housebuiding industry. However, despite this positive sign, other figures released this week remind us that there is still a burgeoning deficit that needs to be met.

Property prices have risen, according to Rightmove's latest house price index. In fact, the statistics reveal that they are at their highest since June 2008. Elsewhere, the housing minister, Grant Shapps, has set out his 'definition' of the zero carbon standard to be applied to all new homes from 2016. It gives more responsibility to house builders and is designed to reduce emissions, whilst keeping costs down.

In other property news, research by Moneysupermarket has shown that buyers don't expect to own a home until the age of 38. This is due to size of deposit required, which may take years to save for and has led to a third of respondents claiming they do not intend to buy a home at all!

Click for details...

This week's top property news stories

2011-05-13T09:52:00.000-07:00

It appears that the spiralling cost of renting has finally had an impact, as more first time buyers are purchasing homes. Figures released by e.surv show that 27 per cent of all mortgage approvals were for properties under the £125,000 mark.

In other news, optimistic teenagers expect to own a home by the age of 25. Of the 12,000 teenagers surveyed by RBS, over half felt this was realistic, as well as many hoping to earn £35,400 by the same age, despite the current average being only £18,705. Elsewhere, sellers are being forced to reduce their asking prices by £20,000 to secure a sale. Vendors in the North in particular are found to be offering the biggest discount, led by those in Bolton where the average price reduction is 8.5 per cent

And finally, it's been proven that the number 13 is indeed unlucky – for homeowners that is. That's because properties with that number, on average, sell for £3,924 less than their neighbours.

Click here to read more...

Marketing New Homes - Back to Basics

2011-04-07T06:26:00.000-07:00

Sometimes it pays to take a step or two back and review your thought processes. We were having a bit of a brainstorm here at MMS yesterday and it was all starting to get a bit heavy. So during a stroll along the canal bank (just one of the benefits our great office location!) I turned my mental clock back and started to think about the basics of new homes marketing. A summary of my thoughts follows. Yes, I appreciate it is pretty basic stuff, but it certainly does no harm to focus on the basics and get those right before you try to reach for the stars (well, we found it useful anyway).

The unique marketing challenges facing the house building industry

Marketing new homes is like marketing no other product. Whilst there may be some lessons to be drawn from other consumer markets, none can directly compare to the challenges facing marketing professionals in the residential property sector.

The first main difference is that buying a new house (and I include second hand properties in this comment too) is almost entirely a needs driven process. One of the following will apply in 99.9% of cases:

Grown up children leaving home
Couples setting up home together
Couples starting or growing a family
Relocating due to work commitments
Singles either choosing to live alone or being forced due to relationship breakdown or death of a partner
Downsizing after children have left home
Retiring

In a few rarefied cases, the move may be aspirational but in the real world we can probably discount this category, which is likely to mainly apply to footballers, celebrities, merchant bankers and lottery winners.

We also need to understand the main factors affecting the choice of property:

There is truth in the cliché ‘location, location, location’ – this is probably the first factor that movers will consider and is something that there is unlikely to be much compromise on. Factors such as proximity to work, schools, shops, road and rail links will all come into play, as will a general perception of the neighbourhood.
Then comes property type (or design) and again this will be largely predetermined by the buyers’ needs and perceptions: number of bedrooms, apartment or bungalow, architecture, plot size, orientation and so on. And incidentally, whether the property is newly built or second hand is of no consequence to around 75% of house buyers.
Last but not least comes price; again this is pretty much an immovable – everyone will have a maximum budget determined by savings, the amount of equity in their existing property and the amount they earn, which will directly affect the amount they can borrow.

So, to recap so far, there are a whole load of needs and factors affecting choice that we as marketers have little control over as, in most scenarios, they will have been established before the business of serious marketing is addressed (with apologies to enlightened developers who embrace the marketing department at the land buying stage). And there are many reasons why a buyer may choose one property over another. Unlike any other consumer products, we cannot use marketing to create a demand (because the demand is created by the needs) and neither can we use marketing to greatly influence choice on a macro level as the main three determinants of choice (what, where and how much) are outside our control.

At this point you may be asking: ‘what’s the point of marketing new homes if all of these key influencing factors are beyond the control of marketing?’ The trick of course is to identify what we can influence through good marketing practice. We may not be able to create a demand, but we need to understand how consumers go about satisfying the demand that is created by their needs. In the good old days it was pretty simple. Prospective house buyers used the classified property sections of their local newspapers and the shop windows of high street estate agents and that was pretty much it. As long as the house builder had a good exposure in these areas and the product was built in the right location, at the right price and was of a type the buyers were looking for, success would surely follow.

In a way, the basics haven’t changed. If the price, location and property type boxes are all ticked then sooner or later the sales will happen. But now there are more ways of communicating with prospective buyers, beyond the old staples of local press and estate agents, and this is where effective marketing can start to make a difference, enabling us to communicate the ‘what, where and how much’ to a much more precisely targeted audience. Many of the more recently available communication channels revolve around online activity, although we shouldn’t ignore target direct mail, door-to-door and other creative media solutions.

Another external influence we have to contend with currently is the generally ‘flat’ property market, largely brought about by lack of mortgage funding and lack of consumer confidence. But looking back to the premise that it is a needs driven market, there will always be a core of people that have to move; it’s our job as marketers to make sure they buy from our clients.

There is also a big onus on the house builder and specifically its sales team. For example there are creative mortgage products out there that can be made to work for many categories of buyer. The house builder needs to embrace these, working with a good broker to ensure that purchasers are given every opportunity to acquire funding for their purchase (preferably via a product that is not generally available on the open market). A similar rationale applies to incentive packages. Whilst it would be great to sell on the basis of value, quality and service alone, that is unlikely to lead to an upward sales curve in the current market where incentives such as shared equity, part exchange and the Government’s newly announce FirstBuy scheme are widely on offer. If incentive lead marketing is rejected, or utilised grudgingly and half-heartedly, it is reasonably to anticipate reduced sales rates as a consequence. Conversely, a well thought-out and sensitively implemented incentive lead campaign is likely to yield tangible dividends.

The other area where the sales team can have a major effect is the customer journey, from the first point of contact with the house builder through to moving in day and beyond. It is no longer appropriate for sales staff to act as note takers; they need a professional approach supported by a well-planned customer relationship management strategy to ensure that the communication process with prospective purchasers is seamless and ruthlessly efficient. This factor more than any other can probably do more to guarantee your house goes to the top of the prospective buyer’s shortlist.

Better late than never

2010-09-09T02:21:00.000-07:00

It is with a great degree of guilt that I write this, having realised that no less that 7 months have passed since my last blog post. I feel rather like the mechanic who never services his own car. At MMS we're forever preaching to our clients about the importance of keeping online content fresh and making a regular commitment to social networking as part of the marketing mix. Do as I say, don't do as I do.

Having got that off my chest, it's interesting to see what has actually changed since February in the housing market. The biggest influence, I guess, has to be the election back in May and the subsequent impact of a lot of negative press comment regrading the remedial measures needed to get the economy back on track. I don't under estimate the task facing the new government, but I do wish the press would present a more balanced picture. Memories are still fresh of nightly appearances on the BBC by Robert Peston in 2008 - I'm sure he was responsible for a significant proportion of the recession with his sensationalist reporting.

But looking specifically at the housing market, perhaps the most significant change in the last 7 months has been on the supply side, with the abolition of HIPS resulting in many more private vendors coming to the market. That aside, I think there is still a lot of uncertainty out there and the comments I made back in February still largely hold true. Sales are patchy and there are big regional variances; for most developers it is very much a case of having to get on with it and make the most of what market there is. But at least we're still here...

2010 Housing Market Prospects

2010-02-04T03:48:00.000-08:00

I thought it prudent to let 2010 settle into its stride before pontificating on the likely performance of the new homes market looking ahead. But still it seems that the only certainty is uncertainty. Back in October 09 I wrote about the conflicting views that were being expressed by the pundits on the future of the housing market and since then I don’t think a lot has changed in terms of any clear pattern emerging regarding ongoing trends.

In many parts of the country supply levels are low both in the new homes sector, due to a combination of developers mothballing sites last year and build programmes being interrupted by bad weather, and in the resale market I think mainly due to prospective vendors not wanting to market their properties at what they perceive is a low point in respect of value. This factor, combined with relatively cheap money for those with a good credit rating, is having the effect of massaging demand.

However, talking of money, the situation isn’t going to be helped as we hear that Halifax is clamping down on borrowers with cheap mortgages, forcing them to switch to more expensive deals if they wish to move house and several other lenders hiking up their standard variable rate mortgages despite interest rates being kept on hold. Add into the mix ongoing concerns about job security and the likelihood that the Bank of England will pause its radical, money-printing programme known as quantitative easing and it all starts to look a little fragile.

So, putting my neck on the line and calling the new homes market for 2010 I will continue to stand by what I said back in October: “things will remain fairly level over the next year and I think most would settle for that; some stability in the housing market would benefit all concerned.”

At MMS we’re encouraging clients to hold their nerve and, as ever, we’re constantly looking at ways to make every marketing £ work that much harder as budgets are still very much under the microscope.

It’ll be very interesting to see how the year unfolds.

Helping clients to help themselves

2009-11-07T09:06:00.000-08:00

We're building a new website for a client. The initial visuals had been signed off and we proceeded to build the site and upload it to a test address for the client's final approval prior to going live. And then we hit a wall, with the client saying that the site didn't look or feel quite right and could we go away and come back with a list of suggestions to make it better. I'm sure we've all been here before, but this is a no-win situation for all concerned.

Instead we engaged the client and began to probe more deeply into why they felt the design wasn't working. We kicked a few ideas around and there were some good suggestions from both sides of the table - we were working as a team and the client was taking joint ownership of the design process. Before long we'd reached an agreed action list of relatively minor items which will be applied quickly and easily, resulting in a website that the client and our team will be proud of.

Creativity is a two-way street and any client who totally abdicates responsibility for any part in the design process is almost certainly going to send up disappointed with the end result. At MMS we aim to work with clients, not for them. It's incumbent on the account handling team to make sure they're encouraging the client to contribute to the process rather than act as a passive spectator.

Drawing pretty pictures isn't terribly difficult. More of a challenge, and one of the biggest contributions a good marketing agency can make to a client's business, is to act as a catalyst and facilitator for creative thinking.

A load of crystal balls

2009-10-16T03:20:00.000-07:00

I'm amazed at the diversity of opinion amongst the experts, analysts and self-appointed gurus as to what the future hold in store for the housing market and the new homes sector in particular. On the one hand we have credit rating agency Fitch telling us yesterday (15 October) that any signs of an upturn are nothing more than a false dawn and that the "crisis has only been postponed until 2011 or 2012". On the other hand investment specialist Assetz reassure us today that a double dip is unlikely and concerns are misplaced, thanks to expectations of interest rates remaining low and property sales underpinned by a fundamental lack of supply.

These are just a couple of example of the wide ranging predictions out there at the moment. I wasn't at yesterday's HMI conference, but colleagues who attended tell me that many of the presentations were laced with a good deal of caution. The fact is of course that no one knows for certain which way the housing market is going to head and where it's going to be in six or twelve months time. All we know for sure is that there are signs of recovery in many areas; our clients at MMS are certainly achieving sales at a reasonably acceptable level (albeit at values lower than where they really need to be) so we're getting on with it and making the most of the market we have right now.

My guess is that things will remain fairly level over the next year and I think most would settle for that; some stability in the housing market would benefit all concerned.

What are you seeing in your crystal ball for the new homes market in 2010?

PS - If you want to subscibe to our weekly property news round-up so that you can learn about the future as it unfolds, click here.

Think like a home buyer

2009-09-17T05:09:00.000-07:00

In all my (many!) years in new homes marketing, one of most common traps I’ve seen clients fall into time and again is failing to ‘think like a home buyer’ – and, more importantly, think like a buyer of one of their own products.

Picture the scenario: you’re pitching some ideas for a development of first time buyer properties and you know from your market research that the likely demographic for buyers is 25 to 35 year old professional singles and couples. There’s a fair chance that these people are going to be pretty new media savvy – receptive to the web, social media, SMS etc., so you pitch a really neat idea based around SMS as an instant response point for the offline media activity. The client’s response? “I’d never use text to get details of houses for sale…” and it’s dead in the water.

What the client is doing of course is applying his own personal values when judging the optimum communications solution. But as we know, his demographic footprint is totally different to that of his target market.

It’s our job as marketing professionals to demonstrate and persuade the client that he needs to open his mind, and it’s a challenge that MMS relishes rising to. But with the development of web 2.0 and its infiltration into mainstream marketing communications it’s something that we’re going to have to work a lot harder at.

Web 2.0 and house builders

2009-08-30T03:47:00.000-07:00

Web 2.0 and the associated social networking phenomena are clearly gaining a critical mass – and not just amongst the younger demographic. Recent research has confirmed that the majority of Twitter users worldwide are age 35 or older, and young adults ages 18-24 make up only 10.6% of the Twitter population in the US (source: ComScore).

I think web 2.0 is probably where the internet was around 10 to 12 years ago – it’s seen as a bit geeky and a significant minority simply just don’t get it. But that’s what they were saying about the web a decade ago.

So at MMS we’re working hard to understand web 2.0 and, more importantly, ways in which it can be used to give our clients a commercial benefit. The concept isn’t rocket science, but the trick is finding the ways to weave it into a cohesive marketing strategy and convincing the client that this is indeed the future.

Our target market sector – the house building industry – is traditionally conservative in its approach to marketing. There are a few house builders who have taken the first tentative steps; not surprisingly Miller Homes has a presence on facebook and twitter. CALA also twitters, but apart from these two, I’m struggling to find much evidence of web 2.0 activity in the sector.

I’ve already experienced the incredulity from clients when we suggest a strategy that includes entering into a public dialogue with their potential and existing customers. Their overriding concerns centre around potential negative feedback from disgruntled purchasers; perhaps a sad indictment of the builder’s faith in its product. And this stance is blinding them from the potential upsides to be had from developing a two-way online relationship.

Rather like with the web, which is now an accepted part of mainstream marketing, house builders will eventually embrace web 2.0. However getting them there will be a challenge that the team at MMS will enjoy rising to.

Glen Mitton's blog

Last property news of 2011

What's in the property news this week?

The week's top property news

Top Property News Stories

What's in the property news this week?

What's new in property news

The week's leading property news

Top Property News

What's hot in the property world this week

Round-up of top property news w/e 3 June

In the property news this week

The week's top property news

This week's top property news stories

Marketing New Homes - Back to Basics

Better late than never

2010 Housing Market Prospects

Helping clients to help themselves

A load of crystal balls

Think like a home buyer

Web 2.0 and house builders