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.
6 June 2011
27 May 2011
In the property news this week
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 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.
20 May 2011
The week's top property news
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...
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...
13 May 2011
This week's top property news stories
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...
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...
7 April 2011
Marketing New Homes - Back to Basics
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:
We also need to understand the main factors affecting the choice of property:
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.
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
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.
9 September 2010
Better late than never
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...
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...
4 February 2010
2010 Housing Market Prospects
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.
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.
Subscribe to:
Posts (Atom)
