We provide funding to locals who really understand the property market in the West of England, and there are lots of development opportunities.
The critical thing is identifying your target market – whether that’s a sale following development or if you plan to refinance the property to buy-to-let and rent it out.
With two universities, great schools and a vibrant business community, Bristol has a strong demand for both privately owned and let housing.
According to Juliette Maytham, managing director of Bristol-based estate agent Bluesky, Bristol has a “real mix of people and housing”.
She says: “Bristol and the South West have a severe shortage of housing. This was the case before house prices dropped back in 2007 and the problem hasn’t gone away.
“If anything it’s got worse due to the lack of properties built between 2008 and 2010 when market conditions forced builders and developers to down tools.
“This high demand was only held back by a lack of mortgage lending and fears of negative equity.”
Over the past 12 months mortgage lending has recovered and various government schemes including Help to Buy has given buyers a confidence boost.
But Maytham warns that the shortage of properties has caused gridlock in Bristol.
“While there are large residential housing development projects going on all around the city demand still outstrips supply and we are merely trying to catch up rather than meeting housing needs,” she explains.
But this is where brokers can step in and add value for their clients by understanding the local ebbs and flows of a property market.
Taking account of likely demand for refinance or sale is critical when considering loan terms and assessing the cost of a deal for developers.
Getting that right can be the difference between profit and loss, which is why we’re encouraging brokers to engage with the property market in their local area so they can show clients they are willing to go the extra mile.
Where to invest in Bristol
Redfield and St George
These areas have seen a huge jump in value since the beginning of the year with prices now over what they were at the peak of the market. This is mainly due to the proximity to the city centre, nice Victorian housing and great facilities like St Georges Park and Redfield high street with its shops and cafes.
Oldland Common and Longwell Green
These areas are also performing exceptionally well, says Maytham, which she suggests may be due to the quality of schooling in the areas.
“Longwell Green, has always been a hotspot for families due to the good schools and standard of living,” she adds.
What to invest in
Maytham says for developers looking to provide housing that people want to live in the biggest shortages of stock are for family homes and affordable housing.
“Two bedroom houses are the most sought after of all,” she says. “They make great first homes, great returns for buy-to-let investors, great second homes for people upsizing from a flat, great homes following divorces, great homes for single mums and downsizers – the list goes on. We always see a large demand for two bedroom homes in all areas of the city, even when the market is poor as they cater for some many different groups of people.”
Developers seek opportunities to fill gaps in the market, and Maytham says there are plenty.
She says: “You only have to look at places like Clifton to see that it is home to young professionals of varying incomes and students as well as the seriously wealthy single professionals and families alike.
“Bristol was a more culturally divided City with different areas catering for different cultural feels, Stokes Croft and St Paul’s probably being the most famous for its vibrant and non-capitalist culture, while Southville and Bedminster are served by many independent cafés and restaurants and are considered a hub for art, theatre and design.”
Long Ashton and Almondsbury meanwhile are more “village like” while Portishead with its marina is different again. “There is definitely something for everyone here in Bristol,” she adds.
Bristol is suffering from a severe shortage of properties for sale, prompting would-be sellers to keep their homes off the market until they find the perfect property.
Maytham says prices in the city are “rocketing” and an already under-supplied market is under even more pressure from people afraid to market their homes for fear they’ll be left without somewhere to move to.
She says: “Upward movement in prices and the shortage of stock is making many home movers nervous to market their own property until they have found and secured a suitable property for themselves.
“This stems from a fear of selling quickly and then not being able to find anything to move to; they don’t want to be forced to move to something less than perfect and don’t want to mess around potential buyers by leaving them dangling while they house hunt.”
The message is clear. The latest figures from ONS showed a 5.5% rise in house prices in the South West of England over the year to April.
Brokers have an opportunity to take advantage of this recovery by alerting clients to the fact there are an increasing number of finance sources to fund smaller residential developments, heavy refurb projects and auction purchases. That in turn should return some much needed stock to the market.