The slowing off-plan sales market in London means more and more homes are being completed without finding a buyer.
The decline in sales to overseas and buy-to-let investors is presenting problems for developers, but also presents opportunity by bringing back into play the domestic buyer market, which wants to buy a completed home.
That changing sales dynamic is leading to a shift in agency thinking, and one that Marsh & Parsons is intending to take advantage of as it attempts to barge its way into the top five residential agents.
Traditionally known as an estate agent, it intends to use its 28 London branches to offer stock from its new homes and development consultancy division, moving away from the reliance on off-plan sales – though still continuing these – and stealing a march on rivals.
“That was one of the core appeals to set up this business when I came on board,” says Charles Holland, head of residential development and investment.
“We saw the shift away from a more intensive international sales model to a more domestic sales model.”
Holland attributes this to Help to Buy, the recovery of the economy and the mayoral-led agreement that schemes would be offered both abroad and at home simultaneously.
“All of that played to us, but the main thing has been the re-emergence of the domestic sales market.”
Holland was appointed four years ago to grow the land and development business, which now has 16 people.
The latest two appointments have been Alex Greaves as head of new homes sales, and Rory Cramer, new homes head of consultancy and strategy, both of whom joined from CBRE.
“For us, coming from a larger new homes-focused agency to an estate agency creating a new homes business, the opportunity was really clear: having a brand that really spoke to consumers and was already well established,” says Cramer.
“Having the front office network for us is absolutely key and a big focus for us is understanding how we really make the relationship between new homes and front office work.”
Marsh & Parsons is just one part of the changing sales dynamic in the London new-build market.
Two months ago, LonRes launched a new product aimed at putting unsold new-build stock on to estate agency books to boost sales.
The attraction of Marsh & Parsons, according to Cramer and Greaves, was that it already has this service.
“The way the whole system operates, we have a very unique open-register database system,” says Greaves. He explains this means someone in the new homes team can sell through the front office network, and vice versa.
“That is unique and it’s a challenge that a lot of the bigger agencies, especially once you have international and country departments, sometimes don’t make the most of,” he adds.
Cramer says often the first question when speaking to developers is: “How do you interact with your front office?”
“I don’t think anyone has really got that right, it’s a very difficult thing to do. But we really put that first and foremost expanding the business.”
Focusing on the domestic market also means different sales trends, and that comes with its own challenges, according to Greaves. He points out that most domestic buyers are incredibly transient.
“Now it’s much more focused towards product and price, they are becoming much more flexible on different locations,” he says.
Cramer agrees affordability is key, and a priority is making sure developers are given the right advice up front, ensuring they are building where the demand is.
“We see a sales period as a marathon not a sprint,” says Cramer.
“What is really important to our clients is making sure a rate of sale continues over a 2.5-year build period, and that’s what our database does and that’s what focusing on domestic purchasers does.”
The plan, says Holland, is to become a top five residential agent for development services in the next four years. Parent company LSL is supporting this, while the 28th estate agency office has just opened in Islington.
“We want to, as a business for new homes and land, build that up over the next three to four years,” says Holland.
“That is going to involve rapid expansion of the team here, more sites, more staff in the land team and a build under Rory and Alex.”
To send feedback, e-mail alex.peace@egi.co.uk or tweet @egalexpeace or @estatesgazette
