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Five questions CACI data can answer for residential house builders

Tuesday 3 October 2017 Data Insight & AnalyticsDemographic DataProperty Development

Dan Parr's picture
By Dan Parr
Successful home building depends on selling – or letting – properties quickly to unlock capital and provide a rapid return on your investment. That’s a lot easier if you can match each development to a clear, existing need in the local area.
Often, that relies on judgement from experienced professionals, who develop a “sixth sense” about which sites will work, and how best to use them. But with increasing competition and development land at a premium, it’s good practice to reinforce those ideas with data.
Our new e-magazine for residential house builders showcases our new dataset that can help you to identify the most likely home movers, where they are, and what they need. 
We’ve identified five questions the data can answer for a home builder – and in doing so, stack the odds of success firmly in your favour.


According to census data, roughly 6-7 million people move house each year. But these people aren’t evenly spread across the country – using CACI data, house builders can identify people who are more likely to move than others, and anticipate future demand.
We analysed the ISER’s Understanding Society study, and identified key demographic markers that movers have in common. Then we compared this to our own Ocean database of 48 million UK adults, to find the part of the population who are statistically most likely to move house in the future. 
Once you have this information, it’s easy to find locations with a high proportion of likely movers, and focus your efforts where there could soon be a shortage of housing stock. 
It’ll come as no surprise that London has the biggest market of potential movers with 1.1 million, but when ranked by proportion, it comes only tenth. Bristol has the highest proportion of movers at 23.9%. 


But meeting demand depends on more than location; you also need to build appropriate homes for the people who are moving. So we matched the most likely movers with our Acorn segmentation tool, to identify which of 18 demographic groups are most likely to move in the near future. This can give you key information on their income, lifestyle, wants and needs.
But people don’t stay in one demographic segment for their whole lives. If your housing development takes 18 months from acquisition to disposal, the character and needs of the local population is likely to have changed. So using our data to understand your likely buyer’s life story and predicting who’s going to move into your target group is key to unlocking maximum value. 
Residential House Building Graphic


It may sound obvious, but movers’ requirements in a home vary greatly by both region and lifestyle. Data analysed by different Acorn groups can tell us a lot about the type of housing, tenure, features and local facilities movers are looking for. 

For instance, the “City Sophisticates” group may have an above-average income, but are three times more likely than average to cycle to work every day, so may need bike storage. “Executive Wealth” living out of town will likely own two or more cars. 
Acorn Category


The average house price is 7.4 times the average household income – around double what most mortgage companies will lend. 33% of the UK’s population can’t afford the average house price where they live – that’s over 21 million people. But the proportion changes dramatically by location. 
Examining the relationship between average incomes and house prices allows you to identify the best places to build your next project – as well as determining your strategy over tenure and price point, and likely affordable housing requirements.
Residential House Building Graphic


But income and house price are only part of the picture when it comes to affordability. With many lenders requiring a 10% deposit, savings play a key role – and the cost of living in an area is also important to site selection and pricing strategy, both to the homebuying and rental market. Thankfully, CACI also produce this data.
Take London for example. A 10% deposit on the average house would set you back £64,039 – and while the average household income is high, so are outgoings. The average Londoner has just 36% of their income left after essential outgoings have been deducted, against a national average of 49%.
Residential House Building Graphic


Data can tell you a lot about an area, and who the best potential market for a development might be. But don’t think it’s all numbers and no intuition – in fact, the two work hand in hand. An experienced housebuilder will be able to read and interpret the data, use it to test and support their ideas, and build a business and investment case backed by hard evidence.
You’ll find further useful details and statistics in our e-magazine; or if you have a particular site or area in mind, please do give us a call here at CACI. We love to talk about data.

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