Property
Published: October 29, 2024 | Updated: 6th November 2024
Dorset’s property and construction sectors face a range of challenges and opportunities, from housing demand and affordability issues to the impacts of sustainability regulations and Brexit.
How are key players in the industry navigating these pressures while planning for the future?
To find out, Dorset Biz News brought together a panel of industry leaders for a roundtable discussion on the state of the property and construction sectors in Dorset.
The conversation revealed a sector that is resilient yet cautious, with participants calling for greater collaboration and planning to ensure long-term success.
The attendees were:
Peter Atfield – Director of Town Planning at Goadsby
Darren Frias-Robles – Managing Director of Whitefox Chartered Surveyors
Sarah Heath – Commercial Property Partner at Frettens
Chris Kane – Co-Founder of Greendale Construction
Alan Lindstrom – Business Manager at The Business Magazine Group
Richard Meller – Corporate Tax Director at Saffery
Sam Pither – Former Editor of Dorset Biz News (Chair of the discussion)
Chris Sheppard – Associate Director of Underwriting at MSP Capital
Paul Stewart – Managing Director of Goadsby Commercial
Paul Taylor – Business Development Manager at Dorset Chamber
One of the most pressing issues raised was the growing housing demand and affordability crisis.
Paul Stewart
Paul Stewart, Managing Director of Goadsby Commercial, highlighted the significant shortage of homes, stating: “If you don’t build enough homes, it’s simple economics—prices will rise due to demand outstripping supply.”
He also pointed out that changes to the Renters Reform Bill could further complicate the rental market by discouraging private landlords from staying in the market.
“Private landlords will struggle with the new regulations, but institutional landlords, with their resources and flexibility, will find ways around these restrictions,” Stewart added.
Another major concern is the impact of rising house prices on the workforce.
Peter Atfield
Peter Atfield, Director of Town Planning at Goadsby, emphasised that high property prices are pushing younger people out of Dorset, leading to a shrinking talent pool for local businesses.
“If young professionals can’t afford to live here, they’ll leave the region, and that’s already happening due to demand outstripping supply” Atfield said.
This exodus is making it more difficult for businesses to attract and retain workers, which could hinder the region’s long-term growth.
Atfield also emphasised the alarming gap between housing delivery and demand: “In Dorset, you’d need to increase housing construction by six times to meet the government’s targets.”
The affordability ratio in the region is already challenging, with average home prices being 11 times the average earnings in Dorset.
The planning system was another critical area of concern.
Chris Sheppard
Chris Sheppard, Associate Director of Underwriting at MSP Capital, noted that Dorset’s property market is resilient, but the slow and complex planning process remains a significant barrier: “If the planning system doesn’t improve, investment will go elsewhere.”
Alan Lindstrom questioned what exactly is causing these bottlenecks: “Would that be because the planning is too slow? Is it because the land isn’t available, or is it because we cannot get staff to actually handle the work? Where are the blocks?”
He echoed the concern that these issues are slowing down development across the board.
Peter Atfield responded, highlighting the resource shortages in local planning departments. “Honestly, the system is too slow. We have the English Channel over there so that doesn’t help. BCP and Dorset, and all authorities in Britain, do have a resource problem.
Sarah Heath
“They really have a serious resource problem,” Atfield said, adding that the government’s proposal to add more planners may not be enough.
Sarah Heath, Commercial Property Partner at Frettens, agreed that local authority planners face resource shortages, exacerbating delays.
“Local planners are understaffed and underfunded, making it hard to speed up the process,” she said.
The panel also explored how town centres are evolving, with commercial developments increasingly incorporating mixed-use spaces.
Darren Frias-Robles
A prime example discussed was the redevelopment of Bobby’s in Bournemouth.
Darren Frias-Robles, Managing Director of Whitefox Chartered Surveyors, emphasised how these mixed-use developments are essential for revitalising town centres that have seen a decline in retail footfall.
“With high streets facing challenges, projects like Bobby’s show how town centres can adapt by offering more than just retail, creating vibrant communities where people can work, shop, and live,” he explained.
The panel agreed that while such projects can be costly and complex to deliver, they represent a necessary shift in the way towns will need to develop in the future, especially as the demand for flexible workspaces and urban living continues to grow.
Hybrid working and the changes it has brought to office space demand were a key topic.
Darren Frias-Robles highlighted the increase in demand for more flexible office space arrangements.
Richard Meller
However, he also pointed out that finding suitable office spaces in Bournemouth is becoming more difficult.
Richard Meller, Corporate Tax Director at Saffery, echoed these concerns: “There’s been quite a lot of working from home culture, but we are starting to see more firms wanting their staff to come into the office much more regularly, possibly up to five days a week again.
“That obviously presents a problem for transport, and there’s just nothing really available within Bournemouth in terms of office space at the moment.”
Paul Stewart agreed, noting, “There is a shortage, and a lot of office space has been taken up by residential conversions.”
Financing property development in the current economic climate was another hot topic.
Paul Taylor
Chris Sheppard pointed out that securing loans for developments has become more difficult due to economic uncertainty and rising interest rates. “We’re seeing developers hesitate because the cost of borrowing has increased significantly, and lenders are becoming more cautious,” he explained.
Paul Stewart added that for smaller developers (unless cash rich), obtaining finance has been extremely difficult given the interest rate hikes since October 2022 .
“For small developers, getting financing is almost impossible with the current conditions,” he said.
Sheppard reinforced that lenders are also becoming more discerning due to rising costs: “We’re lending more cautiously, ensuring developers have capacity for cost overruns and delays.”
Despite the challenging market, he remained optimistic, stating, “If you’re building the right product in the right place, you can sell it without issues.”
The labour shortages and supply chain issues stemming from Brexit were discussed extensively.
Alan Lindstrom
Chris Kane, Co-Founder of Greendale Construction, emphasised that the industry is still feeling the effects, particularly in terms of skilled labour: “Many of the skilled workers we relied on have left since Brexit, and it’s hard to replace them,” he explained.
Alan Lindstrom added, “If it wasn’t for Brexit, we would have had access to more staff.” This lack of skilled workers, coupled with higher costs, is making it increasingly difficult to complete projects on time and within budget.
Rising material costs were highlighted as a significant concern for developers.
Chris Kane explained how the cost of materials has skyrocketed over the past few years, affecting project budgets and timelines.
“The cost of materials is bad, but the uncertainty is even worse. You can’t plan with confidence,” he said.
This sentiment was echoed by Sarah Heath, who emphasised the importance of finding ways to mitigate these costs while still adhering to sustainability standards.
“We talk about sustainability, but until it’s cost-effective for developers, it won’t happen at scale,” she added.
Dorset’s strategic location makes logistics and distribution a vital part of its commercial development.
Darren Frias-Robles pointed out the increasing demand for industrial and distribution space in the region: “The rise of e-commerce and the need for more efficient logistics networks is driving demand for warehousing and distribution centres in Dorset,” he explained.
However, Chris Kane noted that the county’s transport infrastructure is not keeping up with this demand.
“Transport bottlenecks are a major issue, especially for logistics companies operating in and out of the region,” he said.
The industrial property market in Dorset is showing growth, driven by demand for logistics and manufacturing space.
Paul Stewart commented on the strong demand for industrial units, but warned that the lack of available land could limit future growth.
“The industrial market is thriving, but we’re running out of space for new developments,” he noted.
The need for more coordinated planning to support the industrial sector was also raised by Sarah Heath, who emphasised the importance of collaboration between developers and local authorities to ensure that industrial projects can move forward smoothly.
Transport infrastructure remains a critical issue for property development in Dorset.
The panel discussed the limitations of the current road network and the need for improvements to support future growth.
Chris Kane warned that unless transport links are upgraded, developments will struggle to remain viable: “If we don’t start planning ahead, we’ll face bigger problems down the road,” he said.
Paul Taylor added that transport infrastructure is key to attracting both commercial and residential developments.
“Without proper infrastructure, developers are hesitant to invest in large-scale projects,” he noted.
The roundtable concluded with a sense of urgency about the need for greater collaboration between developers, local authorities, and government to address Dorset’s housing and development challenges.
“If we don’t start planning ahead, we’ll face bigger problems down the road,” Kane warned, summarising the sentiment in the room.
