Curious about the impact of Brexit on residential development? Read through to the end of the post for a bonus section on the potential impacts of Brexit.
Will PropTech replace land agency or empower it? How must the planning process evolve if councils are to meet their house building targets? Our panelists tackled the big questions at the 2018 Roundtable here at LandInsight HQ. Here are the key points from the discussion:
The downturn in the market has created new opportunities for developers who are savvy and creative. There are deals to be done across the market, listed buildings, industrial conversions, failed sales, rooftop developments and more.
Automation: Automated assessments for the smaller apps and would take pressure off planning officers making the system more efficient for everyone.
Mixed-use: Policy is still very protective of retail. We might see a loosening in the protection of retail to allow different types of uses in to town centres.
Control: Due to the controlled process, it is easier for developers to manage their time scales and estimate costs. More interestingly they can manage their borrowing like never before, they are 'in and out' on the funding much faster.
Financial management: Modular building allows quality control and helps developers estimate costs. Over time perceptions about modular some how being inferior will have to change.
Commercial real estate companies are gathering and analysing data about how people are dwelling in their buildings. It will be interesting to see how this will develop in residential real estate as there are greater privacy issues.
It would be fair to speculate that businesses that intend to hold their properties for a long period of time would be the first to adopt such technologies. For example businesses with a build-to-let model would be more keen to see how tech can help increase yields as compared to a build-to-sell business.
Expected rise in cost of construction materials: This will ultimately depend on the trade deal that is agreed. The Department for Business Skills and Innovation reported 64% of all imported building materials were from the EU. A weakened Pound Sterling has already increased costs for developers, if a free trade deal is not reached imported goods may be subject to tariffs, duties or quotas.
Expected rise in cost of labour: As per data from the Office for National Statistics, 33% of London’s construction of buildings workforce were EU nationals. The cost of labour would increase in proportion with the shrinkage of labour supply.The labour supply may shrink depending on the final deal reached with respect to immigration and the free movement of people. A shortage in the labour supply may not only increase costs, but may also slow down development delivery as a whole. The statistics suggests, London will be disproportionately affected in this respect. On a UK wide scale, EU nationals accounted for 10% of workers in the construction of buildings sector (London- 33%).
“There is this impression that the UK is a golden goose, but there are also massive infrastructure projects in France and Germany and the workforce will go elsewhere.”
Raouf Belmouloud, Grace Charles Property
Uncertainty may encourage income driven deals: James Graham, CBRE suggested that until there is clarity on what the final deal will be, we may see investors seeking income driven deals rather than development focussed deals.
Roundtable Panelists (Left to Right): Laith Mubarak - Director, Click Properties | Dan Minsky - Director, Estates Office | James Graham - Director, CBRE Development| Jonny Britton, CEO & Co Founder, LandInsight | Zuhair Mirza, Principal, Avamore Capital | Daniel Hillman, Managing Director, Hillnic Homes| Matt Firmston-Williams- BDM LandInsight | Raouf Belmouloud, Managing Director, Grace Charles Property
As it stands, we’re in the middle of a longstanding housing crisis, and its in all of our interests to make finding new land opportunities a simpler and more effective process.
LandInsight is the answer. It has been developed to remove the barriers and inefficiencies that result in developers and individual buyers missing out, wasting time and incurring unnecessary costs.