Property developers have an exciting year ahead. As people continue to spend more time at home, many are reassessing how they live and work, which is driving demand for new housing that can meet society’s changing needs.
Now is the time for developers to seize the moment and plough all their efforts into keeping their property development plans on track.
The Impact of COVID-19 on Property Development
Property developers have not escaped the impact of the coronavirus pandemic — from supply chain problems and decreased workloads to cash flow problems and staffing crises, 2020-21 has been a difficult time for the housing industry, and many property development plans have gone awry.
But, even in the strictest periods of lockdown, work on construction sites was permitted and the forecasted drop in buyer demand has yet to materialise. Rightmove reports that demand for new homes is still outstripping supply and resident property data expert Tim Bannister says: “Concerns of a cliff edge for the housing market at the end of March have dissipated.”
The ongoing uncertainty caused by the pandemic in conjunction with Brexit taking effect on trade will continue to present challenges for housebuilders and construction companies. But it is possible to thrive and grow if the right strategies are in place.
Top Tips for Keeping Property Development Plans on Track
With careful planning, property developers can excel even in a slow market.
- Maintain a Healthy Cash Flow. If business is slow and there is less money coming in, hitting project milestones can seem almost impossible. But there are always opportunities to reduce spending on non-essential expenses, allowing you to funnel the budget that you do have to the areas where it is needed most. This could mean furloughing staff, negotiating prices with suppliers, switching investments or selling off stock.
- Partner with a Part-Exchange (PX) Company. Outsourcing your part-exchange scheme will save valuable time and resources. If your buyer is struggling to sell their existing home or battling property chain problems, this could throw your plans off course. PX can help you to repair broken property chains, avoid lost sales, prevent delays and keep your development plans on track. Your client will also see the benefits — a guaranteed, risk-free sale, no hassle, no estate agency fees and the flexibility to move at a pace that suits them. Everyone wins.
- Boost Employee Productivity. Even small-scale developments require input from a team of diverse professionals. Without quick access to the expertise and workforce capacity necessary for the job at hand, your project plans will founder. Furthermore, this team will need your support if you want them to achieve optimum levels of productivity. It can be tempting to ignore considerations such as employee wellbeing and development when business is tough, but this is exactly when your people need a boost the most. Employers who consider the needs of their workers, offer flexibility and demonstrate a commitment to investing in them, will enjoy higher levels of retention and loyalty, driving down costs and increasing employee productivity.
- Reassess Your Goals. Sometimes it’s necessary to adapt a development plan in line with changes in capacity and budget. Keep your plans continually under review and make sure that goals and deadlines are realistic. If you’re selling off-plan, set a clear target for sales and create your development plan to support this objective. Without clear goals, it’s impossible to keep plans on track or to measure success.
- Develop Strategic Partnerships. Leverage the power of successful partnerships to help you complete builds on time and to standard while also hitting sales targets. Do your investors have an impressive track record? Do they have their own network of partners that will allow you to double down on your sales efforts? Building relationships with local land agents and estate agents will put you in a prime position to win over new buyers entering the market, which will be crucial if there is a drop in demand later in the year.
- Explore New Property Financing Options. If your budget is causing delays, consider alternative sources of funding. There may be a better deal out there or a type of financing you have never considered before. Check out our handy guide on “How to Get Funding for Property Development”.
Property developments can be thrown off track by any number of causes, from staffing issues to supply chain problems. In the current climate of economic uncertainty, developers need to expect the unexpected and be prepared to tackle it head-on. By adopting an agile approach that allows plans and goals to be quickly adapted in line with changing business needs and circumstances, property developers can continue to hit targets and maintain a healthy bottom line in even the most challenging times.