From the first glimpse, price seems like one of the easier of the 4P’s to manage; you can change it, it can vary from site to site and reducing it is a sure-fire way to sell a trouble plot. However, if the price is right from the off this puts the development in much better stead for success. Your pricing strategy should be formed based on several key factors. We’ll discuss these in today’s blog.
One of the most fundamental concepts in marketing is the marketing mix. The 4 P’s; Product, Price, Place and Promotion. It’s such a simple concept it’s easy to discount, but it is the core of marketing anything, including, of course, new homes.
When a development isn’t selling as well as was hoped, one of the 4P’s is almost always the problem. Each development is a careful balancing act of costs, supply and demand and customer profiling. It isn’t a simple process; buying the right piece of land (place), at the right price, allowing you to build the right product and then promoting it effectively.
Getting the price right as early as possible is critical in getting your development off to the very best possible sales start. From the first consideration of the development, before you’ve even purchased the land, think about what your potential audience is willing to spend and for what.
When you consider buying a parcel of land, the price of your plots should be a key consideration. Buy the land at too high a price and you might be setting your plot prices too high as a direct result. If the land seems cheap there may be a reason for that – can the area substantiate the development you’d like to build, or will you have difficulty selling all plots in good time and potentially have your money tied up for too long?
Any land purchase no doubt comes with considerable analysis and review. All factors of what you build affect the final pricing of each plot including location, local demographics and amenities, transport links, local competitor developments, the product you build, seasonal pricing variations and of course, general supply and demand locally.
One sure-fire way to get pricing right is to take an off-plan sales approach. By selling off-plan you can test your pricing without committing it to print, plus money in during the early stages of a development is always good news. There is also an opportunity here to test your thinking with regards to layouts and choice and extras to ensure your product is finely tuned to the desired market to get the best possible price.
Pricing is also a great way to draw in sales interest. Pricing messaging on hoardings or as part of a promotion will grab the attention of those for whom price is a key decision point. Help to Buy and shared ownership options are also great tools to find buyers who might not be able to get on the housing ladder without support, something the new build sector is now renowned for.
Stock plots can cause a problem for smaller developers who need the cash flow for other projects or areas of the business. Reduced, promotional pricing on stock plots can help to release the money tied up in a development in exchange for a quick sale. Plus, sold plots look good to some less confident potential buyers, reassuring them that others have purchased, too.
Have you got your price right? If you’d like some help identifying and planning for your ideal buyer, the Antler team can help. We’re committed to helping you sell homes, quickly and at the best possible prices.Read our blog about Product, the first from the 4P’s series, here: https://antleragency.co.uk/the-property-marketing-4ps-product/