Data is vital to clearing property hurdles

Ross Allan, director of data services, Hometrack

Increasing pressures and challenges for developers and investors means basing decisions on conventional wisdom is no longer an option for those who want to maximise the potential of sites.

Ross Allan, director of data services at Hometrack, tells Property Week about how technology can help.

What are the most significant challenges the UK property sector faces?

The property sector is experiencing a range of challenges that are fundamentally reshaping development strategies. Increasing building safety regulations, market volatility and lower house price inflation have led to pressures on developers and housing associations. Rising material costs and skilled labour shortages are squeezing profit margins, while government targets demand the development of 1.5 million homes in this parliament.

Getting schemes through planning is also an issue and there have been significant delays in unlocking sites. While the government is working on this and has made some strides to improve the situation, more fundamental changes are needed to truly expedite planning.

These challenges are forcing a more strategic approach to site development and developers have to do all they can to maximise site potential. This can include exploring innovative solutions such as build-to-rent
and mixed-use developments.

Traditionally, housebuilders would buy a site and know that by the time they had developed and sold the properties in five or 10 years, house price inflation would have run away to a point where, even if the site was quite marginal in its profitability, they would still do quite well out of it. Now, development is much more challenging to do, because we’re not seeing the same levels of growth, particularly in the South and the South East.

The traditional model of land acquisition and development is becoming increasingly complex and requires more sophisticated decision-making and planning. There is no doubt the landscape is challenging.

What role does data play in building confidence in decision-making for development?

As these pressures reshape the property space, data has become a critical lifeline for modern developers. The days of relying solely on local agents’ insights and historical trends are rapidly disappearing. It is essential to engage with advanced technologies that can provide real-time insights into local market pricing, sales rates, planning approvals and affordability constraints.

For example, 50% of new-build sales take 13 months or more to be registered with Land Registry. If you’re a housebuilder and you want to understand what other new builds are selling for in that local area, getting that information 13 months after the fact is far too late. Being able to get true data that gives up-to-date market information is incredibly valuable.

At Hometrack, we have access to mortgage survey valuations on a live or near-to-live feed. This helps form an understanding of both prices and sales rates to enable housebuilders to benchmark themselves against competitors.

When it comes to planning, these data points also help developers to get an understanding of what other sites have been given approval in a local area; where ground is being broken; what other developers are building out; and at what rate. It also shows supply and demand information. This is really important for planning and understanding what you could be building. This type of data gives confidence and understanding on where there are challenges and where there are opportunities.

Artificial intelligence is also having an impact on data. We can use natural language processing and machine learning models to understand what else is available in areas and predict patterns and direction of travel for the market. It’s a fantastic tool that can really help us move in leaps and bounds in the right direction to support the sector.

What impact will the government’s recent Spending Review have on UK housebuilding?

It’s a really exciting time and there were lots of announcements related to housing, although it is still early days.

First, the Affordable Homes Programme [now the Social and Affordable Homes Programme] has been increased from £2.5bn a year to £3.9bn on average – it’s really welcome news and a big boost for housing associations. For the new programme, we now need to ensure that the funding is leveraged to get maximum value for taxpayers’ money.

The rent settlement at the level of the Consumer Price Index plus 1% for the next 10 years will also be vital for providing housing associations with confidence to start building again and gives them that real reassurance over the long term.

Other positive factors include low-interest loans for social housing providers; an additional £2.5bn being allocated for this should provide further capacity to develop in new areas.

Private housebuilders will welcome the Mortgage Guarantee Scheme becoming permanent, too. It increases the availability of 95% loan-to-value mortgage products and that should help unlock demand in some areas where there are affordability constraints.

We can expect to see calls for a new type of Help to Buy scheme to help us meet development demands and support affordability. Any support for first-time buyers could be a massive boost, especially as stamp duty costs have increased.

How successful has the UK property industry been in incorporating technology?

We’ve been around for over 25 years and have clearly seen over this time the importance of technology integration within the systems that support developers.

We offer automated valuation model technology, which has the ability to speed up the buying process, reduce cost and make it more efficient. It gives buyers and sellers confidence and hopefully helps to streamline that process.

More broadly, there is a lot more that can be done in conveyancing. Technology is really helpful in terms of using information and market intelligence data, being able to understand what is happening in local markets, understanding what competitors are doing and benchmarking. It supports us to make more informed decisions and with longer-term strategy planning.

What future opportunities are there to maximise the impact of property data and technology?

Many businesses in the housing sector still rely on traditional, manual processes and intuition, particularly in pricing and planning. There is significant potential to improve decision-making using data to inform long-term strategies, site selection and affordability.

Mortgage applications and lender decisions could benefit from risk data and automation, while conveyancing remains inefficient and ripe for technological transformation. Agents can be better supported with tools to guide buyers and sellers.

Climate change is also adding urgency; homes must become more energy efficient and resilient, and technology can support that alongside green and sustainability loans and incentive schemes.

Housebuilders and housing associations should integrate modern technologies from the outset to meet future needs. The opportunity is still huge.