Due to numerous reasons, the new homes industry is about to experience a sharp rise in buyer demand as we move through spring and summer. The UK has just moved into Q2 and with it comes the new financial year, whilst perhaps not the most exciting moment in the calendar. For new homes builders, it marks a new beginning as the industry moves past a rough year.
In this article, we’re going to look at what you can expect this spring drawing on current market insights and economic predictions. We’ll also look at the best ways that your new homes business can get prepared and increase your lead conversion rate.
How’s the new homes market trending?
It’s true the past year has been hard, with high inflation rates reducing mortgage affordability – both the new homes and resale markets have been affected. But recently, the market has begun to turn a corner. Rightmove’s market report for March, revealed that prices have increased more than they normally do heading into Spring. The 1.5% increase is above the 1.0% historical average heading into March. Further to this, sales agreed and buyer demand had increased by 13% and 8%, when compared to this time last year.
Over the past month the major builders reported their annual earnings and by coupling the decrease of buyer demand with the increase in material prices most saw decreases in profits. For example, Persimmon saw a decrease in pre-tax profits of more than 50% from £730.7m to £351.8m. It’s a similar story for many builders, however the majority of CEO statements remain optimistic for this year – and with good reason.
Housing is also now more affordable than in 2021. Office for National Statistics data released in March examined housing affordability with a ratio between median house prices and median salaries. This ratio was 8.26 in 2023 down from 8.47 in 2022 and the high of 9.06 in 2021 with the pandemic boom. In simple terms, the average house is 8.26 times the average salary in the UK.
Over recent months the Bank of England has held base rates of interest at 5.25%, a record high since the housing crash of 2007. Holding rates enabled mortgage lenders to offer new deals in the region of 4% but these are slowly creeping back up to 5%. It must be acknowledged that the mortgage market itself remains volatile with Moneyfacts reporting that mortgage deals are being pulled in as little as 15 days. So there are still challenges in the market, but things are on the right path and prospective buyers know this.
What does this mean for my new homes business?
It’s expected that there will be three cuts to base interest rates throughout 2024 of 0.25% with the first expected in the summer. This will mean that lenders can offer better deals on mortgages, and buyers are beginning to expect this increased mortgage affordability. Help to buy might be over but there are still people with Help to buy ISAs to cash in. Inflation has decreased to only 3.4% still above the target of 2% – but well below their high of 11.1% in October 2022, a sign of the easing cost of living crisis.
All of this means that we’re to expect more people looking to purchase a home, be that a new build, a resale or their first home altogether. We expect a sudden rise in buyer demand and enquiries on properties across the country.
What can we do as a new homes business to make the most of the new financial year?
There are a range of areas that a new homes business can look to improve their business and make the most of this increase in buyer activity.
With the traditional buyer activity spike heading into spring and summer, your team need to look to make the most out of every single lead and strive for the highest conversion rate you can. After all, between the pandemic and economic downturn – it’s been a rough couple of years for the sector.
It makes sense to revisit your sales training before this pivotal time, even for the most advanced members of your team a small refresher can help. But there are other ways of turning potential buyers into reservations and eventually full completions. Housebuilder Pro streamlines the entire new homes sales journey. The idea – that with an accelerated sales process with digital assistance for processes such as reservations, and choices and extra, as well as enhanced communication you can convert more leads into sales.
Second to these enhanced processes, Housebuilder Pro will also help your sales team monitor incoming leads and stay on top of their follow-ups. Through our dashboard and notification system, your entire team can stay in control of their workflows with ease. This is greatly beneficial when entering a busy season, if your team have been using spreadsheets or legacy systems to stay on top of their work – it’s a simple change to unlock more productivity and capacity within your current team.
If you’d like to see how Housebuilder Pro fits into your plan to make 2024 your best year yet – get in touch with us today to arrange a demo.
