Ross Allan
Director of Data Services, Hometrack
Housebuilders have the capital, land and resources to build at scale. Yet, they do not currently have the confidence that there is sufficient demand to buy their homes.
Confidence is needed to underpin business plans and multi-year development pipelines that leverage large capital investment. Without it, they are unable to act with the assurance and boldness required to accelerate housing delivery to 300,000 homes a year.
Competition regulations mean housebuilders are unable to share data to help inform development appraisals and risk assessments. Better third-party market data and analysis is therefore required to help assess schemes and underwrite investments with greater confidence.
Development through data
Data has the potential to derisk and unlock development. Part of the solution is to access information earlier in the development and transaction process. This includes mortgage applications and surveys on newbuild properties to give a more robust and comprehensive indication of price paid. It also includes proposed pricing and updates on build status for sites and plots, as well as information on sales listing journeys.
These provide vital metrics needed for viability analysis, which the lagged Land Registry data does not offer. This includes breakdown by bedroom count, price per square foot, discounts to asking price and time taken to sell.
Data has the potential to derisk
and unlock development.
Targeted housing with demographic data
Housebuilders must also know who they are building for. Our research shows that many buyers for new developments come from over 10 miles away. Understanding who these people are and how much they can afford is crucial to building the right homes on a site. This requires demographic data to understand how much of a site should be oriented towards single first-time buyers or rental properties for families, for instance. It also needs income data to benchmark affordability and identify nearby markets with spillover demand.
Data-driven approach for housing success
Changing market conditions mean that the success of future developments sits within much narrower margins for error. This demands a standardised and data-driven approach that is able to give the right assurances to housebuilders to operate within these tighter margins. Only then can they act with greater confidence to increase the pace of delivery on a consistent basis.
Our Hometrack comparables database and housing market intelligence products fill these knowledge gaps. They leverage data from mortgage lenders and Zoopla that is relied on by developers, investors and banks to inform and underwrite property decisions. Without access to such data, housebuilders are less able to capitalise on the opportunities to get Britain building.
To find out more about how Hometrack can help, visit: hometrack.com/data-services/
