Miller homes focusing on Teesside
RISING land values on Tyneside are spurring housing development in more affordable areas of Tees Valley, a leading developer said.
Newcastle-based Miller Homes, one of the UK’s top 10 housebuilders by volume, said it was focusing on Teesside because it was “increasingly difficult to purchase land in the north of the region”.
“It’s cheaper, so you can build the right products there, especially for first time buyers and first trade ups,” said sales director Debbie Dunthorne.
The builder, which opened two new sites at Norton and Stockton this week, said part exchange deals were now an increasingly important part of its business, responsible for more than a third of sales.
“In 2007, 36% of our reservations were by way of part exchange and my view is we wouldn’t have had those reservations otherwise,” she said.
She attributed the rise in part exchange deals to an uncertain market and the additional cost of Home Improvement Packs, which add several hundred pounds to a seller’s costs and could even deter them from moving.
“It’s something that clients do not want to bother themselves with - or even understand properly.”
She said that, traditionally, builders had used part exchange to offload plots they were struggling to sell. But she predicted it would become a mainstream part of the domestic building trade, as developers struggled to maintain sales. Miller’s part exchange division had expanded rapidly.
“It’s all about turning property out very quickly - moving that second hand property out to allow you to buy in more.”
2007, she said, had been a year of two halves, but last month the firm saw its strongest sales for some time.
“People have lived through it for six to eight months, but the reality is people need to move home for whatever reason.”
Newcastle-based Barratt Developments sounded a note of optimism on market conditions today after an improvement in visitor levels since the turn of the year.
The housebuilder, which bought Wilson Bowden last year, said forward sales currently stood at £1.61bn, down 7% on the same period last year.
But visitor numbers have “improved significantly” in the first seven weeks of the year and chief executive Mark Clare said he was “optimistic” that the trend would continue through the rest of the spring selling season.
The update came as Barratt - which is building across the Tees Valley in Ingleby Barwick, Middlesbrough and Stockton- reported underlying pre-tax profits of £201.8m for the half year ended December 31, up 14.3% on a year earlier.
Yesterday, York-based Persimmon Homes, owner of Charles Church builders, which are involved in four developments on Teesside, said sales had slowed over the past two months.
Group chairman John White said there were clear indications that the market was toughening, with the firm’s order book down to £1.05bn, compared to £1.3bn for the same time last year.
Meanwhile, figures revealed a surprise increase in mortgage approvals last month, although house prices fell for the fifth month in a row during February.
