Off-plan means in-profit

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Off-plan means in-profit
14/07/2016

The requirement for affordable homes providers to change their mindset has grown considerably – and if you listen you will hear the whisperings of “off-plan means in-profit” getting gradually louder still over the coming months and years.

For decades the mantra “Off-plan means in-profit” have been ingrained into every budding open market housing developer. But if you listen carefully, you may start to hear these words muttered in the darkest corners of the affordable housing arena’s too.

With an estimates 232,000 – 300,000 new units needed per year housing is by no means a Birmingham only concern. With such a shortfall the need to generate finance to start these developments is vast – enter the mixed-tenure housing development and the cross-subsidy model.

On a mixed-tenure development using the profits from the open market units to subsidize the development of the affordable units makes perfect sense. But when the build program relies on these sales the necessity to sell quick becomes a little more urgent.

So – mixed-tenure developers need to break with traditional methods and think differently. More importantly they need to brand, market and communicate differently – they need to act like private developers.

Perhaps one of our first realisations of this came in 2014 when we worked with Kier on the marketing of their Nottingham based Manor Kingsway scheme. With a development identity, web presence, and brochure as standard material we pushed the marketing strategy further to help break down the barriers to off-plan purchase and introduced the housing app. By helping customers visualise what their house will look like, where it will be situated, and how the complicated multi-phase development will come together we counteracted the main barriers to purchase during the early phases of a development.

This is a technique we’d used previously with private developers such as David Wilson and Barratt Homes – but using it to achieve the same aims in an affordable housing setting was a first. But by no means a last. Since that point the requirement for affordable homes providers to change their mindset has grown considerably – and if you listen you will hear the whisperings of “off-plan means in-profit” getting gradually louder still over the coming months and years.

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