Jeremy's Blog - 28th May 2020
The last two weeks have seen an easing in England of the Covid-19 restrictions on the property market, recovering activity in construction and increasing valuation work. With more negotiations and transactions, we may see how the property markets have moved.
After 50 days of restrictions, there is the pent-up demand from many of the estimated 373,000 transactions said to have been stalled by the lockdown and then those newly motivated to buy this spring. Zoopla reports buyer interest to be 20 per cent higher than at the start of March with that recovery in the English provinces rather than London or the, still restricted, devolved countries. Future activity then turns on prospects for incomes and the availability of lending. What happens as the furlough scheme, now covering 8.4 million people, is withdrawn will be critical for the economy, business and property.
The impact on property goes wider than the housing market but the impression is of lesser activity in the commercial property market while there seem to be cautions about finance for development. Beyond that lie questions about whether the shape of business will have changed. Not only will some businesses develop, some start and some fail but they may want different things from property.
Businesses have had to adapt rapidly to new practices and new technologies. The rise of home working has seen even city brokers allowed to trade from home; more may now work more days from home. Much of this will not be unlearnt. However, offices have facilities, potentially more secure IT, the benefits of the interactions for business development and some separation of work from home life without the transport and lifts for work in large cities. Some major London offices might not fully re-open until next year and perhaps then with a reduced presence.
One answer might be the rise of the rural office, recognising where staff live with a separate and supported place of work without public transport, linked for larger firms to a smaller hub office. Following the trend for county town offices to go to business parks, it could offer advantages for IT and meetings while giving a better balance between space and people.
Such a change could, in turn, have effects on the rural housing market, especially if people come to want more space in their homes as well as outside them, as well as drive projects like the Oxford Cambridge Arc.