The Medusa effect of PLC new homes
In Greek mythology, the goddess Medusa turned everything she looked at into stone. The same could be said for God’s own Country through the blight of new homes being built by large property development public limited companies (PLC’s). Vast swathes of our green spaces are being consumed by a plague of identical Stepford-style houses.
I’ve long argued that we are building the wrong types of properties for the wrong people in the wrong locations. Just last week, a Greenpeace report claimed that 11,000 homes a year are being built on land liable to flooding.
It makes me wonder why planning permission is being granted to developers in places such as the recently saturated flood plain at Greetland near Halifax? As I see it, much has to do with the leadership at the top. The former housing minster Esther McVey had zero property experience and was the 10th minister in the post in as many years. She was succeeded by Chris Pincher who unsurprisingly, also has no property expertise. Is there any wonder we have such a mess on our hands?
With so much mixed information out there, it’s important to filter out some of the myths when it comes to PLC new build homes.
As well as it being a place to live, many people look at their home as an investment which they hope will increase in value through time. But when it comes to PLC new homes, you pay an upfront premium, similar to when you buy a new car. As most of us know, as soon as you drive the car off the forecourt, the value takes an instant hit and it’s the same with these types of new build homes. Unless you live there long term, earning the premium back will take time, with owners usually relying on market appreciation to do this. However if the PLC developer has maximised any planning potential to satisfy their profit margin, how is it be possible to add value if the market dips?
Many buyers fail to see through the gloss finish. The staging of these properties is highly impressive and instantly appeals to the emotional part of our brains, portraying a glamorous lifestyle straight out of a magazine photo shoot. Clever tricks of the trade are used to fool us, such as using smaller-scale furniture to make rooms appear larger.
Another question is why some PLC developers rarely publish overall square footages. Is it because on a ‘pound per square foot’ calculation they would be vastly inflated compared to the local market, which flies in the face of the Government and media ‘affordable homes’ pledge?
People may feel a certain level of security provided by the various guarantees, warranties and certificates that come with these properties. However it’s a bit like when you buy a new washing machine with a three year warranty – as soon as the warranty expires, something will go wrong! Could it be that these homes are built to only last a certain amount of time?
With each home sold, some PLC developers will take 25% to 30% of pure profit, which helps them maintain their share price. This has led to news stories coming out such as lack of party wall fire protection, shortcomings in cavity insulation, ground rent hikes, home improvement fees, leasehold/fleecehold. You can therefore understand why a New Homes Ombudsman is being established to ensure these areas aren’t overlooked again.
There is talk of them having clout and I hope the Ombudsman will initially create more local authority inspectors. By having more time, they can fully evaluate each new build home on its respective merits, rather than the current generalised rushed site visits.
Overall when buying your new home, it is imperative to keep your eyes open, but please ensure Medusa doesn’t turn you to stone!