HOMES
NEW
sectors within the sector Land sales are a particular speciality for the new homes agents and one where the agent’s expertise is crucial. And recession- related problems highlight this. Peter Krelle points out that the current market is a more interesting market than ever before, since the credit crunch has left them handling some sites which are part fallow, part half-built, and part completed. Part completed sites present a number
KENNET ISLAND READING
Kennet Island in Reading where Romans run the entire sales operation for St James Homes, part of the Berkeley Group. Since its launch in 2006 Romans have sold over 500 units and the site is anticipated to run for a further six years.
developers have left the market completely. While it’s the bankruptcies that have been reported in the papers, there have also been a lot of smaller developers who have simply sold their last development and then walked away from the business. That applies particularly to builders and other businesses for whom the development is an add-on to their normal business. “The amateurs either disappear or get mothballed,” he says. There’s also some concern that
restrictions on ‘back garden’ development could constrain the recovery of the market in London and the south-east, where brownfield accounts for 50 per cent of all development. Despite his worries about the future,
though, Krelle agrees with his peers that this year is shaping up well. The south of England, and especially London, were already bouncing back last year, while the north was still very depressed, but “the north is doing much better this year,” he says, while the south is still buoyant.
A very different sell One thing becomes very clear when you speak to people in the new homes area. While for the consumer a house is a house is a house, for the agent it’s a very different sell if it’s a new one. Chris Browne says this means portals
have to structure their new homes product to take account of this. “New home
Savills are marketing this new barn in East Sussex for Millwood homes at £1,650,000.
developers have a number of requirements which are different from the resale market. These include the representation of their brand and what it stands for.” But it also includes the ability to market multiple units at various stages, from off plan through to completed properties. That, Browne believes, is one of the advantages of using a portal, since “we are able to communicate with potential buyers at different stages in the property cycle.” Peter Krelle says agents who want to
target the new homes sector also need to take on board the fact that it’s a business- to-business transaction. “It’s a more difficult relationship when you have a professional vendor,” he says; “they’re more demanding. But it’s also a more rewarding relationship; if they like what you do, then you’ll get multiple instructions coming back to you again and again. It’s about delivering not once, but time and time again.” While for an individual vendor, a successful single transaction is the name of the game, agents who are working for developers need to be able to demonstrate consistency.
£1,650,000
of difficulties, not least that of problems getting NHBC certification if the original builder has gone out of business, which in many cases, they have. At the same time he believes joint venture arrangements will take an increased share away from outright sales.
‘The key thing for us is knowing who is looking for a particular
opportunity – that varies from week to week.’ peter krelle spicerhAArt
For instance, where a bank has taken
possession of a site, it may enter a joint venture with a developer – retaining a profit share on the eventual sale of the properties – rather than selling the land. “That’s quite a satisfactory way for the bank to get as high a price as possible,” Krelle says, “and for the developer to get finance without taking a hundred percent of the risk.” Negotiating joint ventures, though, takes expertise and a delicate hand. It’s also likely to be a job for the agent’s
rolodex rather than an advert in the Estates Gazette. That’s partly down to banks’ desire for confidentiality, but also to the need for a timely sale. “It’s very much a market for targeted sales,” Krelle says. “The key thing for us is knowing who at any given time is looking for that kind of opportunity – that varies literally from week to week.” It may be a good few years before we see
the property market return to the heady levels of development that we saw in the early part of the last decade. But new homes certainly seem to be recovering from the immediate impact of the credit crunch, and there are a few agents out there brave enough to take a bet on it.
Add your own opinions to the debate:
www.propertydrum.com/articles/newhomes
PROPERTYdrum OCTOBER 2010 15
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