2008
Roger Tidyman, managing director of BEL Global Trust Bank predicts the property development market in 2008.
The recent quarter percentage cut in interest rates to 5.5% and the further cuts anticipated in the first half of 2008 is good news for the slowing house market. This should help to entice some nervous buyers back into the market and increase turnover for developers.
We expect modest price falls in the first half of the year with some recovery as further interest rate reductions take effect and mortgage lenders recover their appetite in the second half of 2008. We predict flat nominal house prices over all in 2008.
In difficult marketplaces like these it is crucial for all property developers to research buyers’ needs and local demand in order to build appropriate product. Increasingly new models of development which may initially be less profitable but which will be less volatile should be of interest. Building a mix of private and shared ownership housing in association with a registered social landlord may be one solution.
Having researched their market, developers need to build quickly so they don’t miss opportunities; keeping construction and financing costs to a minimum.
There is still sufficient demand for the right product in the right location and knowledgeable developers will still make progress in these more demanding times.
At BEL Global Trust Bank we know the market and can identify good development opportunities. We will provide great value development finance which can increase your returns.
