JMA Gloucestershire surveyor says housing developers should remain optimistic

Gloucestershire, along with the rest of the UK, has seen house prices fall for the sixth month in succession.  A lack of confidence in the housing market is thought to be responsible for the continuing price drops; tighter controls on mortgage lending have deterred anyone keen to step onto the property ladder.

Cheltenham-based Project Manager & Quantity Surveyors, Jeremy Moore Associates Ltd has witnessed first hand how the slow-down has affected local developers.  MD Jeremy Moore says “The last thing developers want are built houses standing unsold; this reduces their turnover and profit, which in turn ripples throughout the rest of their subcontractors & suppliers.   It also often means that any new land may not be developed until things improve.”

However, it isn’t all bad news for Gloucestershire; new buyer enquiries and new instructions to sell property have increased for the first time in six months, above the national average.  Jeremy Moore says “Our first hand experience at JMA has shown the buy to let market has died on its feet, but the demand for owner-occupied homes has taken far less of a dip.  I think everybody is reasonably confident that the underlying demand for new homes in Gloucestershire remains strong.”

Unfortunately for Gloucestershire developers this has meant that those sites already underway will probably have to be sold at a loss, and many have been clawing back profit by taking up to 5% off agreed order values with subcontractors and suppliers.  Jeremy Moore points out how this recent slump could benefit developers; “Despite the obvious disadvantages of the past six months, it means land prices will return to more sensible rates, so developers can perhaps now afford land that was previously out of their reach.” 

Agents are hoping mortgage lenders will filter the recent interest rate cuts into the market, and housing demand should begin to increase with those first-time buyers waiting on the side-lines.  Critics argue this point, and don’t think many people will be convinced into first time buying in 2008.