Can Self Build help to Overcome a Shortage in the Supply of Properties in the UK?

publication date: Apr 5, 2009
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author/source: Kate Faulkner
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With the fall in property prices and the credit crunch suppressing demand for property in the short term, everyone seems to have forgotten that the UK is still suffering with a shortage of the right properties in the right areas and available at the right price!

However, within the next year or two, as the property market recovers, we will soon see media stories of the shortage of properties available in the UK for first time buyers and smaller one to two people households. The second issue is that developers and planners can't just work together without involving communities. We've seen the dramatic fall in new homes being built in 2009 - from the average of around 240,000 a year to around 70,000, that's a drop of 71% whereas the general demand for property has only fallen by 50%, suggesting that developers are NOT building properties that people really want. For new builds to be successful in the future, it is essential that developers, planners and the community work together to understand local housing needs and all compromise to ensure people's housing needs are fulfilled.

One option that may help ensure this happens is expanding the self build market. Many people dream of building their own home. Five million people watch Grand Designs every week, but only 15,000 to 20,000 people actually build their own home every year. This clearly suggests a desire to build, but something is getting in the way.

According to BuildStore, the UK's biggest self build company, people want to build their own home because they:-

1. Are not satisfied with the existing supply of houses.
2. Want the choice and control over design and layout.
3. Can choose the location they live, subject to land being available.
4. Are able to gain financially such as becoming 'mortgage free' or investors, building to sell or let at a profit.
5. Can achieve a personal ambition and reward.
6. Have the ability to choose innovative products.
7. Want a more eco friendly and sustainable property.

So how can developers, planners and local budding self builders work together to reduce property supply at a local level? The answer is Custom Build.

Effectively homebuyers would work with developers (and in turn with planners) to use their project management and building skills to build bespoke properties on tracks of land they already own or purchase in the future. According to BuildStore, custom build would work as follows:-

1. The developer would ensure roads/utilities etc are supplied.
2. The developer would offer a full build and project management service, or the buyer could choose to just use their tradesmen.
3. Plots would be sold with either a full building contract, or a contract to build to a certain stage.
4. The buyer purchases the serviced plot from the developer before the build starts either with cash or via a specialist mortgage.
5. Buying in this way means the consumers can have early input into the property's layout, fixtures and fittings, creating a bespoke home.
6. The customer would pay for the land and then pay the developer at each stage of the build.

There are issues with building in this way in that the land and buildings would have to 'work together' from a visual perspective, so if one person wanted the equivalent look of a Grade II Listed building, and someone else wants a 21st Century modern build, the two are unlikely to work side by side.

As a result there may be some initial issues that the planners would have to consider, about what would be acceptable and it's likely that the bigger developers would be less keen to work to this model. However, the small to medium sized developers could do very well out of custom building. They would have to worry less about upfront finance and would instantly be selling 'off plan' a property that someone actually wanted and would pay for in advance a lot more than the normal 10% to 20% deposit.

However, this kind of building isn't likely to kick in until the credit crunch subsides, lenders are happy to lend again and developers and planners come on board to support this new way of working together to satisfy people's demand for property.

To find out more about self build take a look at our Develop and Build section, read our Top 10 Tips about Building a Home and our Guide to Building a Home.  Do you have a property question you want an unbiased and independent answer to?  Contact the Designs on Property team or call us on 01652 641722.
    


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