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This could be the shortest article ever!
From the momentum of a trans-Siberian goods train to a dead stop overnight. This pretty much describes the situation of development within Northamptonshire (and elsewhere in the UK).
So much of the development undertaken over the last few years was funded in the majority by banks. Much of it was speculative development. So it should be of no great surprise that it has all but stopped.
Twenty years or so ago, there seemed to be less development going on and certainly less speculative development. The market seemed more ‘balanced’ (a word repeated in this article). Developers also had to provide a reasonable element of finance themselves (thereby taking on more of the risk associated with development) but in the last 10 years or so, more and more development has been taking place with the banks supplying the lion’s share of finance (secured against the development in question) and therefore the level of risk increased for the bank and decreased for the developer (great news for the developer!) Some banks even took a share in the development (through Joint Venture arrangements). Everyone was suddenly a property expert - A Nation of ‘Donald Trumps’.
As always, more and more people ‘jump on the band wagon’ during the ‘good times’ – seeing the property market as an easy way to make a quick buck (including the banks) and as always the schemes pursued become more marginal as the opportunities available decrease through the effects of supply and demand. And for marginal, read ‘risky’...
Established ‘stalwarts’ such as location and building use and density become secondary considerations to perceived profit.
Mix this in with ever increasing and restrictive legislation (building regs requiring more and more ‘energy efficiency’ – empty rates liability and ever increasing contributions to education / health and highways to mention but a few) and the resultant cocktail begins to taste more like meths than strawberry dachery !
What is required now is stability.
As any Doctor will tell you, a balanced diet is a healthy diet. Don’t stop eating red meat and gorge yourself on pine kernels. Likewise, our economy needs to be more diverse. It cannot survive on bricks and mortar alone.
The property development industry had recently become colossal. It was too big. Too many people all chasing the same deals. Too many noses in the trough. Like Mr Creosote and his ‘waffer’ thin mint. The explosion has been just as messy....
In many ways this collapse, whilst both inevitable and painful, will be for the better. Perhaps banks will go back to banking, accountants to accounting and solicitors to doing what they’re asked....rather than all of them forcing their limited knowledge and opinions on the property sector. The Government also needs to address their growing parasitic approach of looking to the development industry to ‘top up’ the funding of the NHS, education system and crumbling national road network. Fewer noses in the trough will help balance out the market.
Keep development local. This will help reduce risk. By this I mean that some of the individuals involved in development should be local to the development. Not based hundreds of miles away. Developers (local if possible) working with a local agent, the local bank manager and local solicitor will all be better placed to offer guidance and advice on ‘their’ local market.
And planning! – allow the local planning officers to regulate development. Don’t force them to adopt a National Directive that may not be appropriate for the local market.
Allow the people that know and understand their markets to ‘work’ their markets.
There is a solution to economic recovery, including reviving development and it’s not new.
However it would be unfair and inaccurate to give the impression that ALL development has ceased in Northamptonshire. There are still ‘pockets’ of activity and prop-search.com is working with a number of local developers on a variety of schemes throughout the county.
In Wellingborough, working with Rotherhill Developments we have a number of brand new industrial units available on Park Farm (from 1,800 sq ft to 16,000 sq ft). In East Northants with Deejaks we are offering brand new offices (from 5,000 sq ft to 39,000 sq ft) and Industrial units (from 5,000 sq ft to 15,000 sq ft) on Crown Park. In Northampton working with Lodge Park Developments we have just begun to offer a brand new Local Centre at St Crispins including shops / nursery / restaurant / takeaway / convenience store / health centre and offices and in Kettering we are offering another Local Centre where we have a number of shops and offices available to rent at Barnwell Court in Mawsley.
So there’s still a good spread of activity across the County – and proving the point already made, it seems as though this development activity is through local ‘teams’ developing in their ‘own’ County.........