As restrictions started to ease, construction was able to re-commence on many UK developments, and both house-buyers and renters were once again able to move home.
In the week after the reopening, Zoopla’s UK Cities House Price Index Report found that housing demand had jumped by 88%, with some cities seeing demand rise by 40% from pre-Coronavirus levels.
After weeks of uncertainty, the housing market is able to take its first steps to getting back on its feet.
In the following Q&A, Simon Walker (Managing Director at Homes by Carlton) and Jan Dale (Associate Sales Director at Homes by Carlton and Owner of Urban Base) utilise their experience in their fields to give an insight into the property market on both a UK-wide and regional scale.
Homes by Carlton, MAVEN Bonds’ Strategic Delivery Partner, are a luxury house builder delivering innovative, bespoke residential developments across the North East.
The Homes by Carlton, Urban Base and MAVEN Bonds team, from left to right: Craig Peterson, Non-Executive Director at MAVEN Bonds; Sarah MacNeil, Creative Director at Homes by Carlton; Norman Peterson, Non-Executive Director at MAVEN Bonds; Laura Jane Barnes-Martin, Regional Sales Manager at Urban Base; Simon Walker, Managing Director at Homes by Carlton; Jan Dale, Associate Sales Director at Homes by Carlton and Owner at Urban Base.
Working alongside Homes by Carlton as New Homes Sales Partner is Urban Base, a premier North East property agency, delivering residential sales, rentals and property marketing support.
Jan Dale, who serves as Associate Sales Director at Homes by Carlton as well as the Owner of Urban Base, has over 20 years experience of the property market, delivering a results-driven service for national and regional house builders alike.
In the Q&A, Simon Walker and Jan Dale discuss what each of their own businesses and industries have experienced since the market reopened, whether they expect increased demand to continue, the importance of regional house builders to the housing market, and what’s in store for Homes by Carlton and MAVEN Bonds in 2020.
Q1. It’s been over one month since the housing market was allowed to, at least partially, reopen. What have you seen so far?
Jan Dale: It’s been a positive reopening in many aspects. Demand is high, with Rightmove - the UK’s number one property portal - recording their busiest day on record, with over six million site visits on May 27.
Urban Base have undoubtedly been busier than pre-lockdown, with a surge in enquiries from both prospective house-buyers and renters.
In particular, we have seen a strong number of enquiries on the four new-build developments we’re currently working on with Homes by Carlton - which saw over 600 new enquiries from the day the market reopened.
Homes by Carlton’s Cathedral Gates scheme in County Durham - whose second phase was funded by MAVEN Bonds - is a mixed-tenure development, with 8 units already sold to a housing association on a rent-to-buy basis. This development boasts a beautiful selection of three and four-bed homes, on a tenure that is appropriate for the area - with two rent-to-buy units let within one day of being released.
The Deakin house-type at Homes by Carlton’s Cathedral Gates development in Chilton, County Durham.
Simon Walker: We’ve seen a huge amount of enquiries coming through - some of which have led to a number of early-bird reservations across our schemes at Middleton Waters in Middleton St George, Thorpe Paddocks in Thorpe Thewles, and The Langtons in Redmarshall.
This has been incredibly promising, not just for Homes by Carlton, but the residential property market as a whole.
We have, of course, had to adapt to a new way of operating. The majority of our schemes at Homes by Carlton are still preparing for launch, meaning even before COVID-19 hit, we didn’t have any showhomes open.
Instead, we have invested into technology - improving the Homes by Carlton website, and beginning to roll out virtual video tours, starting with the Deakin house-type at our Cathedral Gates development in County Durham.
Q2. Do you expect this evidenced demand to continue?
Jan Dale: Demand for new homes will continue, on both a sale and rental basis.
We can see on a larger scale that the demand for the building of new homes is incredibly high. After all, it’s estimated that approximately 345,000 new homes are required per year, with only 178,800 completed in the year ending December 2019.
Looking at this on a regional scale though, Urban Base are an experienced property agency covering the North East, and what we have seen in recent weeks is incredible pent up demand.
People still want to move homes - whether that’s acting on the purchase of their first, second or third home, or renting on a rent-to-buy tenure.
Of course, demand within the housing sales market relies on an economic bounce-back, and consumer confidence. These two factors do seem to be heading in the right direction, though tentatively. But it’s worth noting that when there’s uncertainty surrounding the sales market, demand levels in the rental market tend to surge.
Agile SME house builders, such as Homes By Carlton, are able to adapt to this shifting demand, as - especially those with strong relationships with housing associations - can consider flexible tenure options that are appropriate for both the area and the climate.
The government’s Help to Buy scheme is running until 2021, with calls for a further extension. It’s expected that young, first-time buyers in particular will continue to take advantage of the scheme while it’s available, and even families looking for their forever home.
Another scheme proposed by the government would see first-time buyers and key workers given a 30% discount on new-build homes. Though there is no date for the introduction of the new scheme, I expect it will be highly welcomed.
The number of first-time-buyers hit a 12-year high in 2019, and the addition of a new scheme to help people get onto the property ladder will only work to increase those numbers.
Q3. Why are regional house builders such as Homes by Carlton so important to the UK housing market?
Simon Walker: To reiterate, the UK is currently in the midst of an ongoing, chronic housing shortage. It’s not only large, national house builders that are critical in tackling the crisis, but regional SME house builders - such as Homes by Carlton - too.
In fact, regional house builders have, in the past, played a vital role in the development of new homes. In the late 1980’s, approximately 80% of new homes were built by SME house builders.
That number is significantly less now, at around 12%. This is because of a limited access to funding, which regional SME house builders have been faced with in the aftermath of the 2008 financial crisis.
But developments from regional house builders are still extremely important, on a societal, economic and even environmental level.
Generally, regional house builders will place more emphasis on individuality - producing homes with higher quality materials, and driving innovation and sustainability.
For example, Homes by Carlton are trialling CoreHaus on our Cathedral Gates site. CoreHaus is an innovative modular house solution that will reduce construction times, build costs, and have less impact on the environment.
The CoreHaus homes look no different to the other, traditionally built homes in the scheme, and are built to the same high standards.
CoreHaus in progress at Cathedral Gates.
Jan Dale: In my role at Urban Base, I work with both national and regional house builders, and both undoubtedly have an important part to play in re-energising the housing market.
As Simon mentioned, developments from regional house builders are key on a societal level.
They’re able to regenerate communities, creating local jobs - for construction workers, estate agents and more - and often reviving areas.
Homes by Carlton’s Cathedral Gates scheme is a typical example of this. Chilton - where the scheme is located - has a lot of potential, with vast views of the County Durham countryside, close to local amenities, and a bustling community.
What used to be in Cathedral Gates’ place was an old, unused building. Now, there are 14 beautiful, bespoke courtyard homes which are drawing families and young professionals alike to the area, helping it to thrive.
This is particularly important, because smaller developments such as this one are often overlooked by bigger, national house builders in favour of larger regeneration projects.
I also agree that, often, the homes delivered by regional house builders are of higher specification, with more individuality and character - something that is particularly in demand among house-buyers.
Q4. What is in the Homes by Carlton and MAVEN Bonds pipeline for 2020?
Simon Walker: Homes by Carlton have 4 projects that are in various stages of development.
One of these is our Thorpe Paddocks scheme in Thorpe Thewles, where infrastructure work is currently underway, and full mobilisation is expected towards Q4 of 2020.
Thorpe Paddocks will comprise 31 homes, with a mix of three, four and five-bed. It’s located in the perfect rural setting, surrounded by open fields in the historical village of Thorpe Thewles.
We have also recently had an offer accepted on a new County Durham development. This scheme will comprise between 40 and 60 units, with a mixed-tenure of 50% affordable housing and 50% private sale.
MAVEN Bonds have been critical in the success of Homes by Carlton. The alternative finance provided by the property bonds allowed us to fast-track development on our Cathedral Gates scheme, where the construction team had the confidence to accelerate the building programme after 10 plots were sold in the early stages.
After the success of the first loan, we were pleased to receive a separate bridging loan that allowed us to obtain land for our Thorpe Thewles development.
At Homes by Carlton, we are establishing ourselves as an important provider of quality homes across the region. This is thanks, in part, to the alternative finance provided by MAVEN Bonds.
The MAVEN Bonds product is available exclusively to experienced investors who are classified as either sophisticated investors, high-net-worth individuals or professional investors and have the knowledge and experience to make their own investment decisions. Investments are high risk and illiquid, your capital is at risk and returns are not guaranteed. Bonds are not protected by the Financial Services Compensation Scheme (FSCS).
Originally published 18th June 2020, updated 19th June 2020.