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Industry trend: the growing demand for new builds
New build developments are becoming increasingly popular with developers and buyers across the country. With their attractive layouts and help to buy schemes attached to them, new builds are supporting people in purchasing affordable, brand new homes, with a smaller deposit if they are a first-time buyer. However, regardless of the popularity with potential buyers, what are the other reasons that developers want to invest in new builds, and what are the benefits of them?
In many ways, new build developments are more cost efficient compared to full-scale refurbishments or permitted development (PD) conversions. The reasons behind this are that with a new build, developers have the ability to shape up the design and maximise the layout of residential units in order to maximise the returns on the overall project. Furthermore, with full-scale refurbishments, the physical state of the building will be unknown until work on the site actually commences. When this happens, they may identify issues that would require additional work and money to be invested, to ensure that the building is safe and viable.
As the market is moving towards mixed-use developments, new builds allow businesses to incorporate more variances to the project and this is unlikely to happen with refurbishments or PD conversions.
Why are renovation projects becoming less attractive?
Considering the popularity of PD conversions over the past few years, the move away from this development model is a significant shift in the industry. There are various reasons why this has occurred in the property and construction industry.
- To make the ‘financial’ numbers stack up. A lot of projects are being undertaken in the outer zones of London, which has meant that a saturated market has developed over the years.
- The cost of these buildings has increased because of the higher demand.
- Buyers are now starting to look more at new builds rather than living in refurbished buildings.
- New build schemes allow developers to offer the government “help to buy” schemes.
The benefits of new build developments
Further to the fact that new builds are more cost-effective, developers are also able to shape the project from the incept and maximise layout to increase the overall value of the scheme. New builds can be designed to incorporate both retail plots and commercial units into the project, which will attract more interest as well as increase the return on investment.
The social housing element
Most new development sites will have units of social housing included on the site. This is incorporated with the S106 agreements that most large scale developers and developments need to provide social, affordable housing.
Social housing can affect how desirable the development is to potential customers. However, even if there were social housing plots built onto a great site that has been built on prime high-end residential areas, this would rarely affect how in-demand the site is to potential buyers. The desirability of a site depends on the area and social space elements, amongst other things.
Constructing new build sites effectively
Depending on the type of development being constructed, and the structure of the organisation running the project, the professionals needed to drive the business forward will change. Typically the most sought after areas for professionals are:
- Investment and acquisition
- Land and planning
- Design and technical
What makes a new build development stand out?
Many property and construction businesses are focusing their attention on new build developments. Meaning that across the country, the competition is growing. Businesses are going to great lengths to ensure that their developments are the most appealing to potential buyers.
Today, new builds should offer more than just residential apartments. Projects are moving towards mixed-use developments where families and individuals can have amenities in close proximity to their homes. Developers that incorporate commercial and office elements to their schemes will help to generate work within that neighbourhood and create a thriving commercial and residential hub for years to come.
If you are looking to hire within the property and construction sector, get in touch with one of our specialist recruitment consultants today.