Kebbell predictions for 2022 – PropertyWire
Andrea Fawell, Director of Sales and Marketing at Kebbell Real Estate Developers, gave TP an overview of the market factors likely to affect home buyers and builders in 2022.
What are the main factors impacting the real estate market at the moment?
The long-term impacts of issues with the global supply chain and the availability of materials and labor mean it’s increasingly difficult to build on a normal timescale and I can‘I don’t see that changing for a while. Brexit has resulted in the loss of many workers at European sites in particular, there is a huge shortage of truck drivers and the costs of container ships bringing in materials and finished products have increased dramatically. Procurement services are desperate to obtain materials to finish the houses.
There is also not enough stock on the used market. We hope people can have the Christmas they lived‘t have last year and will then put their house on the market because until there is more used stock there will be almost an excess demand for new homes which is a fun thing to do. say for a home builder!
Prices do not change currently but developer‘s margins are reduced with a 15 to 40% increase in material costs. There is about a six month delay for some of our development, but for some developers, my understanding is that there are 12-18 month delays. Supply is simply not able to meet demand, especially since the market has been so buoyant after the foreclosure. All of these factors have a huge impact on deliverability and cost of construction. The deadlines extend beyond what can be programmed, so it is a question of managing the expectations of delivery of new housing.
How is the market for new home buyers today?
It is a very difficult time for home buyers. I have been in the industry for 36 years and have never seen anything like it. People have pledged to buy and move, intensified by the pandemic, but developers can simply‘t deliver within normal time frame or even promise when they will definitely be able to deliver due to any shortages. Homebuyers reserve anyway! Buyers are frustrated but grateful that we are so transparent and forthright about the issues in the market. We are constantly looking for solutions and alternatives, and we keep buyers up to date with what’s going on. Last week we had tiles stuck in a port in Liverpool and other supplies stuck in Felixstowe. Neither port had the staff to remove the tiles from the containers and there was no‘t no truck driver to bring these materials to the site. We sent a van to Liverpool to collect the tiles and when they arrived they were all broken. Buyers had to choose another available tile.
We are in the same boat. By having a collaborative approach, homebuyers trust us and work with us, but it’s a huge upheaval in their lives, many have to find temporary accommodation while developers wait for the right rooms. Once they put their own house on the market, in their heads, they’ve already moved.
Are there any prominent trends or announcements coming to the industry in 2022?
The new deposit unlocking program, which has been tested for over a year, will begin to be considered, especially since this will be the last year of the Purchase Assistance Program which ends in March 2023.
I think the parts swap will become more and more appealing as it means you can stay in your home until the new home is ready for you which is the solution to the delays seen in the industry. Assisted Move, will continue to help new home buyers sell their property and developers pay agent fees if they want to sell their house as soon as possible.
How do home builders approach sustainability?
In preparation for my North Pole crossing in April 2022, I recently took a trip to stand on Europe‘the largest glacier in Iceland and I was blown away by the impact of climate change. We need to take care of all of this as an industry and stand up for sustainability, raise awareness and be mindful of green credentials and what we need to do to play our part. Small changes add up. We give‘t install wood stoves as it has an unnecessary carbon footprint. We work closely with sustainability consultants in all disciplines, from examining what’s going on in our skips to finding the best geothermal heat pumps, but it’s extremely complex, there is no easy fixes and there is still a lot of work to be done as an industry.
We are faced with many difficult puzzles regarding sustainability. For example, will existing homeowners be able to afford and physically install air source and ground source heat pumps in their existing homes? It’s easier for new releases to plan for them, but as we try to secure the future, technology changes so quickly that it’s hard to keep up. Our commitment is that everyone will have a car charging station or the option of installing a car charger, but in Norway wireless chargers are being tested, say in two years.‘ time will we charge our cars wirelessly, in which case will the car charger ports be obsolete? Or is the future really hydrogen cars? The industry can and must do better, but it is far from easy.
Are off-plan sales growth?
The nature of our developments next year allows us to offer off-plan sales for our new developments; Milestones, an 18 luxury apartment development at Ascot and Meadow Court in Iver which includes 39 two and three bedroom apartments. As a result, we favor sophisticated online marketing tools such as html experiences, interactive screens for color choices, and many more. We are investing in the online experience which we believe will give people all the information they need to make an off plan buying decision, unless they go to the site. We’ve all gotten used to buying online, especially during the pandemic, and now homebuyers expect they can find all the information online they need to decide on a new home. Kebbell is all about service and personal interaction, and while it has won‘t change, we find that buyers are already coming to us with the buying decision almost completely taken.
The stamp duty holiday has grown the market, but do you think the real estate market will slow down?
No, but I think you need a good level of used and new stock to keep the wheels oiled and have a healthy market. If we don’t‘don’t get that stock no matter how willing you are to sell your house she won‘t help you if there is nowhere to go.
What will be the effect of changes in interest rates and inflation?
If interest rates rise in the new year, the market will likely continue at that level, but if inflation rises significantly, that could be a problem that, of course, was not.‘Haven’t been a concern for years. Prices are expected to hold unless interest rates soar. What we need is some stability because it guarantees reliability, security and trust.
Is the competition for new homes fierce enough?
People are making the biggest purchase of their life and it is an extremely emotional decision and they must love their next or first property. I fully encourage buyers to look around and see the competition, but I can say this because our specifications, build quality and customer service are so good that I have no doubts they will come back to Kebbell! Competition is healthy and good for home buyers because the standards are high.
Do you still see an influx of Are Londoners moving to suburban cities?
Yes definitely, there is always a constant flow from London, even going all the way to Scarborough! Travel time as a determining factor starts to come back to the buyer‘s psyche, because it seems that a hybrid working method is the most likely outcome over time. Buyers want the country life but be able to get to work maybe two days a week. What’s different is that shoppers are now no longer reliant on the two-hour arc from London as they are unlikely to have to commute every day.
Are you buying more sites and how do you choose them now?
We always buy new sites from those who are ready to build now to use our strength, the assemblage of land and long term strategic land. We are targeting a range of timescales and products, but we also choose to buy primarily from known and trusted places as the market changes big. We came home a bit to roost!
Last year there was a demand for more space, do you still see that?
People still want a good amount of space and outdoor access, but buyers are increasingly interested in the details that will make their lifestyle easy and comfortable. For example, where will they wash their dogs when they come home from a walk? They value durability in terms of not having to drive for their yoga class or for a pint of milk. Good internal storage is also a growing requirement.