Last year the property market faced tumultuous events with rising inflation, ever-changing building regulations, the ongoing conflict in Ukraine, and an uncertain labour market, all posing a significant impact towards property developers. Furthermore, as the cost of borrowing increased, the property market's value tumbled, resulting in 2023 picking up exactly where 2022 fell off. Therefore, property developers must adapt to these changes if they want to achieve long-term success.
But how?
As the current climate continues to worsen, property developers must be able to navigate their way through the storm to prosper. Property developers should be looking to leverage technologies that can reduce risk and cost, as well as increase resilience. For instance, by leveraging-real time reporting tools, developers can easily manage long-term projects, increase visibility and leverage data more effectively.
Uncertainty Within the Property Market
The construction industry’s workforce has shrunk where the number of self-employed workers has reduced by 15.9% within five years. There has been an inability to attract new talent to the industry, and complications brought on by Brexit have meant that significant skilled labour has left the country. Meanwhile, ever-changing building regulations have added another layer of uncertainty to the mix.
According to the Office of National Statistics, the inflation rate at the beginning of 2023 increased to 9.2%. This combined with a shortage of raw materials and global supply chain issues have significantly increased the cost of developing houses. Longer lead times for building materials have also exacerbated supply chain challenges. When combined with rising prices, project feasibility is easily affected and there is also a reduced appetite for risk.
With a host of legal changes being made at the start of this year, such as the UK government’s target to achieve Net Zero by 2050, property developers have had to look at alternative ways to make energy reductions and savings by building more energy-efficient homes. For instance, all new homes must now produce 30% less carbon dioxide emissions than current standards.
Need for an Innovative Solution
With these ongoing challenges posing a significant impact towards property developers, there is a need to find alternative methods to manage housing projects. Furthemore, the businesses that survive this year will be the ones that can drive productivity against increased regulation and scrutiny. An organisation's approach to data should also be at the forefront of senior leaders' minds, to allow them to build a foundation of information to better predict upcoming changes.
So, what tools and technologies are available for developers to survive the storm currently taking its toll on the market?
Leveraging Real-time Reporting Tools
Previously, developers struggled to measure progress against new legal changes as they relied on manual reporting, which brought challenges such as inconsistent reporting and a lack of transparency. When the property market is undergoing significant challenges, these complications are magnified and prevent property developers from managing their projects effectively. However, with industry-focused software solutions in place, developers can easily monitor their progress against new laws and regulations in one centralised location.
Modern reporting tools further enable developers to forecast risk with increased accuracy where people can visualise portfolio, project and programme metrics in one dashboard in real-time. As a result, developers can take action to mitigate risks and demonstrate compliance anywhere, anytime. As data constantly changes, developers cannot rely on tracking data manually and there are simple solutions that put developers in control of data gathering and reporting. Software solutions, for instance, take the pain of data gathering away and give developers the ability to track, identify and take action across costs, risks and compliance.
The Future of Real Estate
The property market is unsettling, with many challenges increasing pressure on property developers. However, the same challenges that are taking its toll on the industry, are forcing developers to find alternative methods to navigate their way through the turbulent market. The ones that will survive and then thrive will be those adopting innovative solutions other industries have used for years.
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