Member Article

The North East is a place to raise families and grow old

Mike Roberts, managing director of David Wilson Homes North East discusses how the brand’s rapid growth reflects the increasing affluence, dynamism and desirability of the region

With the housing market the driving force behind the UK’s economic resurgence this year, the North East has seen a significant leap in demand for housing stock of all types within the region.

However, the new build market, buoyed by the popularity of the Help to Buy initiative, has proven particularly dynamic in the region, with a 26% increase in new home registrations from August to October, compared with the same period in 2012, according to the National House-Building Council.

Though there are many housebuilders that operate within the area, few reflect the way that the region has developed and evolved in recent years in quite the same way that David Wilson Homes has. We produce high quality two three, four and five bed homes, and were initially better known in the Midlands and South, but having been acquired by Barratt Developments in 2007, were launched in the North East in 2010. In little over three years David Wilson Homes has planned, built and sold over 200 homes in the region, which is significantly above national sales rate. In the last three years the brand has been able to post year-on-year sales increases of 25%.

Of course, much of this is simply a reflection of a strong business in a regional market where there is healthy demand. And yet, the manner that David Wilson Homes has been able to maintain growth so significantly – particularly in years of recession – perhaps suggests something more than simply a regional business success story. After all, David Wilson Homes is a brand with clear demographic associations. While property size and price points do, of course, vary by development, the brand is very much associated with growing families and particularly those looking to trade up to larger or more long-term properties. Though prices are naturally competitive, we are not, in the context of the wider market, termed as ‘affordable’ housing. In the main, the brand’s primary consumers will be second or third ‘steppers’.

With this in mind, the sustained growth of the David Wilson Homes brand in the North East may actually suggest some very interesting things about the way that the region is developing from both a social and economic perspective. Indeed, it might even be said that the expansion of David Wilson Homes could be viewed as a microcosm of the area of the whole; a barometer for the health of the North East. While that might initially sound like a slightly outlandish claim, when you consider that the housing market is very often used as an key economic indicator for forecast and assessment, it becomes a much more realistic proposition.

One of the most straightforward of these conclusions is that the strength of demand for David Wilson Homes properties - even during previous years of wider UK economic stagnation - reflects not only a certain market resilience in the North East, but also a general trend towards greater affluence in the region. In the same way that major cities in the area have bounced back from a tough recession period, in recent years the whole region has been part of a major entrepreneurial thrust. In 2010 and 2011 ONS data revealed that the North East established more businesses than anywhere else in the UK[1] (and at a rate to equal London), while the North East remains the highest regional exporter in the UK (one of the few areas in the country to maintain a trade surplus). Likewise, research by Lambert Smith Hampton has Newcastle as the 14th fastest growing city in the UK[2], and a recent Nationwide 2013 house price survey reported growth 5% for Tyne and Wear.[3]

With the UK economic forecast for 2014 full of growth optimism across the board, by sector and region, the North East is well placed for a prosperous few years.

But even in the present, the economic impetus regained in the last few years does appear to have rippled out into pockets of those who live and work there. As well as providing a real economic ‘pull’ factor to the area, this money and affluence is naturally re-invested into housing - creating the economic conditions friendly to those second or third-steppers looking to trade up into new properties.

However, perhaps an even more positive deduction to be drawn from the growth of David Wilson Homes is that fact it suggests that ever greater numbers of people consider the North East as a place to spend the majority of their working lives and beyond – not simply attracting young first-time buyers carving out careers in new areas, but also providing the desirable community locations to bring up families and grow old. If you do take David Wilson Homes as a regional ‘barometer’, the fact that the brand has had a growth in sales of four and five bedroomed homes in the last three years, and had unprecedented interest in the forthcoming development at La Sagesse, lends real credence to this notion.

Of course, housing is but one aspect of the economy, and any business growth in the region is always going to be good for the economic health of the North East. But there’s something fundamental about the role that homes play in modern psyche that gives property ownership an almost unique prominence in UK culture and society. It’s why housing news is often front page material; it’s why the Government prioritised house building and buying to stimulate the economy; and it’s why the sustained growth of David Wilson Homes in the North East is such positive news for the region.

[1] http://www.ons.gov.uk/ons/rel/regional-trends/region-and-country-profiles/economy—june-2013/economy—-north-east—june-2013.html

[2] https://bdaily.co.uk/entrepreneurship/08-01-2014/newcastle-among-uks-top-growth-cities/#bulletin-c6ac4bf86766466a21655439495e073786fc2336

[3] http://www.nationwide.co.uk/~/media/nationwide.co.uk/pdf/hpi/Q4_2013.pdf

This was posted in Bdaily's Members' News section by David Wilson Homes North East .