The new brands have consumer friendly monikers such as Finishing Touches (Persimmon), Expressions (David Wilson Homes) and Homestyle (Laing Homes) and their aim is to try and persuade homebuyers to buy fittings and fixtures from the homebuilders rather than high street stores.
"Why should homebuyers go to Jo Bloggs to fit extras when they can use the homebuilder who knows the house and understands how it has been built," says Bespoke Bellway sales executive Gerry Fox. Bellway Wales launched Bespoke Bellway in November last year and according to Fox it has been well received by homebuyers. "It's a huge potential market and we are very pro-active in exploiting it. I will visit buyers' homes before they move in and show them the Bespoke range. So far around 60% of buyers have asked for extras and they have spent anything from £500 to £40 000."
Bespoke Bellway doesn't actually offer a customised service and Fox says that Bellway Wales limits choice to three ranges per product type to keep administration costs down. Fox says there is scope to broaden the range in the future and sell products to homebuyers after completion.
Westbury Direct is the standalone optional extras arm of Westbury Homes and group managing director Nigel Fee believes the key to profitability is a standardised range. "If we can't see repeatability, we won't do it. Between 80 and 90% of homebuyers must be interested in a particular optional extra before we offer it. We try to avoid the administrative nightmare of providing one-off items."
Optional extras are also available to homebuyers once they have moved into the home and Fee says upgrades will be an important source of future income.
The rise in demand for optional extras can be in part explained by the rise in interest in interior design generated by popular makeover TV shows and glossy magazines. "Two years ago it was buyers at the upper end of the market who wanted extras. Now all buyers are demanding more," says Wates marketing consultant Dominique Sherry. The trend is towards offering more luxury items says Sherry, as "a new house is becoming a lot more of an aspiration".
Unlike Westbury Direct and Bellway, Wates does offer one-off items if buyers specify early enough in the build process. Berkeley Homes will also try to accommodate purchasers' requirements wherever possible. Sales and marketing director Ian Plumley says that Berkeley often builds tennis courts and swimming pools and will undertake unusual requests if purchasers are prepared to pay for them - on one occasion it erected rabbit-proof fencing around flowerbeds.
Many homebuilders also offer design services as part of their optional extras schemes. Homestyle (Laing Homes), Copthorn Homes and Bryant Design (Byrant Homes) are among those offering interior design advice and consultation. Bryant Design managing director Lynne Whiteman believes customers will be more willing to spend on extras if an interior expert is on hand for advice. "There is the potential to make incredibly expensive mistakes if you are spending £15 000 on interior upgrades," says Whiteman.
Landscaping is also becoming a popular add-on and Wates Homes, Copthorn and David Wilson are among those offering advice and services. David Wilson Homes and Greenwich Millennium Village are even considering offering environmental add-ons. "As part of a standard package the majority of purchases wouldn't value it, but there are still a significant proportion of people who would pay more for them," says David Wilson managing director Mike Stansfield.
David Wilson has its own landscape designers and the company is keen to keep its service provision in-house. Other in-house staff include carpet fitters and for David Wilson it is an opportunity to control its services and create further revenue streams.
Wilcon Homes says it doesn't offer many optional extras because it claims its homes have a high level of specification. "Many of our new homes include what would be deemed extras within the price. Although there are some regional variations, it is not unusual for carpets, appliances, fitted wardrobes and turfed gardens to be included at no extra cost," says sales and marketing director Jo Kenrick.
Countryside offers optional extras but doesn't rely on them to make money. "Optional extras have to make a contribution, but it is a labour-intensive part of the business, and people won't pay much of a premium for something like floor coverings. We see it as a service, and as something that encourages purchasers in at an early stage," says sales and marketing director Helen Moore.
For those who see optional extras as a source of profit as well as a customer service there appear to be reasons for optimism. Over half of Westbury Homes' regional profits stem from Westbury Direct, according to managing director Fee. And Prowting Homes' Midlands division says that even buyers of its cheaper homes in Stoke are spending around £3000 on optional extras: it is aiming for an average extra 20% revenue from each of its homes.
Copthorn Homes has embarked on an options and choices programme but marketing director Neil Armstrong thinks the potential more limited. "In America residents pay around 30% of the house value on optional extras. At the moment here it's 3-10%. In England people seem to spend everything on their mortgage and end up having no pennies left to play with," he says.
Optional extras top 10
1 Wooden flooring2 Electricals (POWER, TV, phone and IT points)
3 Carpets
4 Integrated kitchen appliances
5 Wall tiles
6 Floor tiles
7 security systems
8 Conservatories
9 gardens
10 Curtains In our survey 20 of the biggest UK homebuilders were asked for their three most popular optional extras. Despite the renaissance in carpets wooden flooring came top of the pile, just pipping electricals. Just outside the top ten lie more luxury high-value items such as smart technology, entertainment systems and Jacuzzis. “I thought initially that we would only sell one in a blue moon, but now Jacuzzi baths have become popular,” says Countryside sales and marketing director Helen Moore.
Source
Building Homes
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