As an annual January visitor to Interiors UK
at the Birmingham NEC I’m honoured to have been asked to be one of their four official bloggers for 2012. The show’s aimed at retailers, interior designers, architects and property developers, with me representing the latter. I’m in esteemed company, with (from left to right) retail blogger Karine Kong of Bodie and Fou
, architect Bob Borson at Life of an Architect
and interior designer Jane Price Stephens of www.janepricestephens.com
all blogging away alongside me 🙂
To kick start things this week, I was asked a few questions by Interiors UK about the current state of property development play in the UK. Be interesting for me to know what you think, do you agree with my answers, property peeps, or not?
What do you think are the main challenges facing the property development industry are for 2012?
“The main challenges for property developers large and small are three fold – the lack of financing available from banks for both businesses and individuals, the resultant stagnant market and the lack of exit strategies for those who want to develop property. If people aren’t buying houses or have reduced funds to do so, then houses don’t get built by large house builders or renovated by small companies.”
How best should property developers face/tackle those challenges?
“For larger house building and development companies, times have been extremely tough recently with many going bump, shedding jobs or even becoming accidental landlords. The greed and factored in profits-for-all which abounded in the mid-noughties were unsustainable, especially in city developments. The property prices were nonsensical when compared to the wider market and that lesson must be learned. Building or developing excellent properties which are liveable, sustainable, affordable, design-led and desirable shouldn’t be a problem in an industry so full of talent, but it will take time for confidence and cash to come back to the property market.
For small developers diversification is key. Many are landlords / small builders anyway so will concentrate on those sides to their business, updating existing rental stock or working for clients who are redesigning houses they are staying in as opposed to selling. For them it’s about staying ahead of the curve and making sure their building work is top notch, complies with ever changing regulations and is super special design-wise…. which is where visiting trade shows like Interiors UK comes in!”
Any industry insights in to the year ahead… does 2012 look bleak? Brighter than 2011? What are the negatives and the positives for property developers at the moment?
“Without wanting to be the voice of doom, the immediate future is not so hot in terms of buying and selling houses, there is still much uncertainty ahead. 2012 is not going to be a record breaking year for the property market, not on the positive side anyway! It’s a time for education rather than speculation. In the near future only the most gorgeous and desirable properties will sell quickly so some developers will need to up their game – good news for the consumer.
These difficult times may also spell good news for the interiors world. If people aren’t spending large sums to move home, they will be increasingly spending smaller sums on updating – kitchens and bathrooms, redesigning interiors, new furniture, fabrics and wallpapers!”
I can’t see the property market recovering in 2012. There’s a lack of buyers, itself caused by a paucity of mortgage funds. More people will look seriously at renting for the foreseeable future.
House prices were artificially high for so long it’s going to take a long time to get them down to a more realistic level, if they ever do come down. It could only last until the bubble inevitably burst. But who’s going to be the first to accept that their house is worth much less than what they want to sell it for?