Over the past year, we have experienced unprecedented events across the world, including the UK. Whilst parties active in the UK property market were most worried at the start of the year about the effects of Brexit this has been now replaced by the effects of the global pandemic.
Despite these concerns, we have been witnessing a mini Housing boom since the end of the first lockdown. The ‘rush to the countryside’ has occurred where people have moved out of our cities to the countryside seeking good quality housing, open space, local schooling, and the ability to work at home. Together with other factors this led, according to Rightmove, UK house prices increasing at the fastest rate for four years in November.
Whilst we are in mini Housing Boom evidence is increasing that the market may be cooling. Rightmove feel that asking prices have been reduced with people setting them at more realistically prices to try and achieve a sale by the end of March 21 when the current change to stamp duty is withdrawn. Should the Government withdraw the change to stamp duty in March as planned this will have an effect. In that same month we currently have the withdrawal of furlough and the potential implications this will bring to the levels of unemployment this country will experience. We also have Brexit occurring in December of this year putting ourselves in unchartered territories, in particular, if it is with no deal in place with Europe.
Despite the uncertainty the above will undoubtedly generate the forecasts for our economy to remain relatively optimistic. An example of the is the forecast by Oxford Economics who, whilst they are forecast our economy to contract in terms of GDP by 9.7% they expect it rebound in 2021 with 8.5% growth, with unemployment levels reducing during the year. We then need to translate this to how it will affect house prices. Whilst uncertainties early in the New Year is bound to have a downward pressure on prices Agents such as Savills are forecasting that whilst house prices in the UK are forecast to remain static in 2021 by 2024 they are forecast to of grown by 15%, with the strongest growth occurring in the south-east of England.
The Way Forward for Housing
Whilst we, therefore, face challenges ahead the housing market is forecast to remain fundamentally sound. Governments have often seen a strong housing market being pivotal to economic recovery. This can be seen as being believed by our current Government. Indeed, we should be fully exploiting this in our path to recovery but what lessons have we learnt from the pandemic in terms of housing.
I believe that the lifestyle changes forced on us due to the Pandemic will remain. Whilst when times permit there will be a return to office working, home working will be adopted by many. People have recognised that potentially the changes have brought improvements to the quality of life which should be fundamental to us all to achieve.
In terms of housing design, I feel we will see pressures for;
- Increased living space
- Greater provision of accessible Open Space
- Better car parking provision
- Better accessibility to schools and local facilities such as shops, pubs, restaurants, etc…
- Good broadband connection being an essential for new houses
These and other measures should be adopted wherever possible in our future designs.
In terms of demand, we will also see it remaining strong for the accommodation of the elderly. Demand for care will also remain given the demographics of our country. We will also, through the active support of such Agencies as Homes England, need to look at ways in which we can increase the provision of affordable housing as with house prices being forecast to increase the need for such accommodation will only increase.
So, whilst we are going to face challenges in the future, the housing market is forecast to remain strong. At Jansons we are wishing to have a greater presence in this sector, delivering increased numbers of sites for housing where our housebuilding partners will develop the much-needed housing. Future articles are planned to show how this is being sought to be achieved – watch this space!
Huw Williams BSc(Hons), MRTPI