Taylor Scott International
US home builders using new data analysis to decide where and what to build
A proliferation of data and new data analysis methods are changing the way builders in the United States buy, sell and develop vacant land, according to experts. Builders are cautiously optimistic that easier credit and more flexibility will help the new homes market rebound in 2015, according to experts at a building and building products symposium in New York. The state of the land market, a key factor in determining what kinds of housing gets built, where and at what price, was a common theme throughout the various discussions. ‘The real opportunity of land goes beyond the land itself. Builders are looking at land as much more than a piece of dirt now,’ said Steve Benson, chief executive officer of Phoenix based land banking and advisory firm Community Development Capital Group. Landowners and buyers alike are using multiple data sources to examine what is being built in other areas, which designs work best for certain parcels and which builders are best suited to maximize certain features of a given piece of land, Benson explained. Rather than building a certain set of homes on a given piece of land, developers today may be more apt to sell their land to a different type of developer rather than undergo a project themselves, or choose to build a different type of home than they normally would, based on data, he pointed out. ‘Real estate has always been about location, location, location. But with land especially, it’s future location, future location, future location. Today, data helps inform that equation for builders much more than in the past,’ he added. High land costs, and perhaps unrealistic value assessments by landowners, are a big reason why developers are having difficulty developing more entry level, lower cost communities and homes, according to Greg Vogel, chief executive officer of the Land Advisors Organization, an Arizona based land brokerage. Developable tracts of land appreciated very quickly in value during 2012 and 2013 in anticipation of a building boom in 2014 that largely has yet to materialise, he explained, adding that strong recent years have convinced today’s land owners that their land may be worth more than it is. As a result, builders are increasingly forced to put higher prices homes on developments they do control in order to recoup their higher land acquisition costs. This will create challenges for larger builders looking to cater to lower end and first time buyers, who are expected to enter the market in higher numbers in coming years. ‘Most observers agreed that it’s just a question of time until we see millennial demand pick up. If the entry level buyer does come back, I’m not sure there will be a lot of opportunities to develop those kinds of communities right away,’ Vogel said. Beyond the kinds of large, multi acre sites on the edge of cities and towns favoured by big, publicly traded home building companies, smaller lots located in downtowns and established communities also represent… Continue reading
British govt releases enough unused land for over 100,000 new homes
Enough unused public sector land has been released in England to build over 103,000 new homes, it has been announced. Communities Secretary Eric Pickles said that the amount of land sold by the government surpasses the original commitment set by the Prime Minister, and is expected to rise again by the end of March this year. Now, the government is calling on councils and developers to help turn it into housing as soon as possible, and is urging local authorities up and down the country to follow this example and sell their redundant sites and buildings. ‘House building is at the heart of the government’s long term economic plan. That’s why, rather than leaving surplus public sector land idle, we are putting it to good use by releasing it to build new homes across the country,’ said Pickles. ‘I now want to see councils following Whitehall’s example and explore what they can do to release land and deliver new homes and savings for local taxpayers,’ he added. Housing Minister Brandon Lewis pointed out that housing starts are at their highest annual total since 2007, but acknowledged that more homes are needed. ‘That’s why for the last four years we’ve pulled out all the stops to release formerly used surplus public sector land for house building meaning we have now exceeded our own target,’ he added. On top of this, there are plans to release land with capacity for 150,000 homes between 2015 and 2020. Lewis also pointed out that the government has already taken major steps to boost house building and get more people into a home of their own by simplifying the planning system, making it easier to convert empty buildings into new homes and prioritising development on brownfield land. ‘The results are clear as house building starts are now at their highest since 2007, empty homes are at their lowest level since records began and government backed schemes have helped nearly 192,000 people buy or reserve a property since 2010,’ he added. The land released to date comprises of 899 sites across England, and includes Ministry of Defence land at Aldershot in Hampshire where planning permission has been granted for up to 3,850 homes as well as road improvements, two new primary schools, extensions to two secondary schools, two new pre-schools and day care centres and 110 hectares of new managed green space, play areas, sports and community facilities. At Norton Barracks, site of the former Army archives in Worcestershire, sold by the Ministry of Defence to Rooftop Housing Group in partnership with Wychavon district council, is now the site for 10 new affordable homes for returning services personnel and those who have retired from the Armed Forces. Bexhill former galley sidings, a derelict former oil storage depot with railway sidings site sold by the British Railways Board, now has permission for 64 properties on the site, a mixture of two three and four bedroom properties, including affordable homes. At Stratford City former railway land, sold… Continue reading
Prime property prices in central London rise for first time in five months
Prices in prime central London rose for the first time in five months in February, boosted by price growth in markets with a higher proportion of properties that would not be subject to a proposed mansion tax. It saw a marginal increase of 0.1%, the first since September 2014 but annual growth slowed to 4%, which is half of the 2014 average of 8.1%, according to the latest report from Knight Frank. The firm says that it is a market where activity has been kept in check by the potential of a mansion tax on properties worth more than £2 million after May’s general election. Stronger performing markets included Islington and the City and Fringe in the eastern area of prime central London, where prices grew by 1.3% and 1% respectively in February. Both recorded annual growth of 9.1%. The Riverside market, which was included in the index six months ago to reflect the high quality of developments in areas like Battersea and Vauxhall, has also risen 0.4% this year. Elsewhere, there were declines in more traditional prime markets with higher value properties, including a fall of 0.8% in Chelsea, a drop of 0.2% in Notting Hill and a fall of 0.2% in South Kensington. The existence of a two speed market was underlined by the fact values for properties worth in excess of £5 million and £10 million declined by 0.1% in February. Meanwhile, prices in the £1 million to £2 million price bracket grew 0.4% in February, up 6.8% in the last year. ‘We estimate that 46% of £2 million-plus properties are located in the prime central London boroughs of Westminster and Kensington and Chelsea. However, eight out of 10 properties on the £2 million mansion tax threshold would be located outside the two boroughs in areas of suburban London and the Home Counties,’ said Tom Bill, head of London research at Knight Frank. ‘Though any tax would be lower in value and there is more clarity on the potential levy for properties worth between £2 million and £3 million, it underlines the mistaken belief the mansion tax would start to bite in prime central London,’ he added. Continue reading
