There is no doubt that Covid-19 has impacted on the property not just in the short term but it’s likely to impact in the long term too.
Here are three changes we are likely to see, which I hope are here to stay!
1 It’s the cost of a home, not the price you pay that’s more important
Over time, the slightest hint of the property market faltering has pretty much stopped the market in its tracks. People are spooked by uncertainty, however slight or major it may be. Over the last few years, we have seen people’s worries about Brexit and then an election, meaning the property market hasn’t been that buoyant (but it doesn’t apply everywhere of course).
However, having been locked up in our homes for months on end, this may well have changed people’s attitude towards putting a roof over their head. Today, people appear more concerned about the roof they have over their head and whether they can afford what they want and need now, as opposed to trying to ‘time their entry’ into the market.
Hallelujah as far as I am concerned! When people are living in their homes for 15-20 or more years, it means less stock is coming onto the market less often, so finding that ‘forever home’ and making sure you can afford it now and in the future is much more important in my view than the price you pay.
2 More home working
The CBI reported some fascinating stats from the ONS which suggested that 51% of people were working remotely and that 37% of companies are ‘conducting or planning’ to review office requirements moving forward.
37% of companies are ‘conducting or planning’ to review office requirements moving forward
Of course, this depends on the type of business and in turn will impact on different areas, differently. For example, those dominated by services are likely to see the biggest fall in office space use, with nearly 90% of the banking sector reviewing office space versus 18% of those in manufacturing.
Regionally, remote working is around 57% of people in London vs 35% in the West Midlands.
This will impact on the property market in various ways. Firstly, yes people will look at commuting less. I decided to shift out of London back in the early 2000s and have never looked back. House prices for the property I wanted were a third of what I would have paid for down south and although I had to take a pay cut, it was worth it. And when I do need to get into London it’s just an hour and half away – not that far off what the average commuter had previously spent!
This means agents need to get better at looking after ‘inter regional’ moves rather than just local ones, and of course it means people will want much more from a property. We already know gardens, office space and fabulous internet connections are bound to take more of a priority in the future than ever before.
It also means that those who work and build in cities need to think long and hard about how they develop property into the future. Communal spaces and easy access to some shops in case of regional lockdowns could make the difference between selling or not.
3 Office to resi conversions?
In the CBI/ONS survey: “47% of companies believe that they needed no more than 70% of their current office space.” Now is the time to look at a local area and work out where, in areas where supply is lower than demand, how can we improve the balance? With the new planning rules potentially requiring areas classed as ‘growth’, ‘renewal’ or ‘protected’ and planning not necessarily required (but building regulations still needed), it is likely that switching office space to residential for buildings and areas where this would be successful is likely to increase, and if done well, it could provide much needed homes for the future.
Of course, there are many more implications, but these are likely to be the top three from my perspective and it would be interesting to hear your thoughts too!