It is inevitable that demand in the housing market will change because of the COVID-19 pandemic. The housing market has re-opened, and there has been a significant level of demand and interest in property. However, as we move forward, there will likely be some changes, and there are some property trends arising from COVID-19 to look out for.
Rics have spoken to industry professionals
It is always a great idea to hear what industry professionals think, and Rics have issued a survey.
The Rics survey revealed:
· 81% of property professionals believe there will be a greater interest in homes which have a garden or a balcony
· 74% of respondents predict a rise in demand for homes which are located close to parks and green spaces
· 68% of respondents believe properties which have a private space as opposed to a communal area will be in greater demand
· 78% believe there will be a decrease in demand for tower block property
· 58% predict there will be a fall in demand for property in extremely built-up urban areas
Respondents in the survey don’t expect there to be much change in desire and demand for homes which are located close to hubs such as bus stops or train stations.
Simon Rubinsohn is the Chief Economist at Rics and he said; “There are already signs that those looking to buy a house are responding to the conditions created by the pandemic by seeking out properties with gardens or balconies and nearer green space. These and other similar features are likely to increasingly command a premium over higher-density urban locations, according to respondents to the survey.”
This opinion has been supported by Tomer Aboody, director of property lender MT Finance, who said; “Buyers are focusing on outside space and parks, which will in turn provide a resurgence in interest in the home counties as buyers feel they can get more bang for their buck the further out of the city centre they are prepared to go. This will also give them more indoors space to work from home in future, and perhaps make a second lockdown easier to deal with."
There has also been backing for the notion that buyers are focusing on outdoor space from Rightmove. Rightmove’s housing market analyst Miles Shipside said; “During lockdown people have been re-evaluating what their must-haves are, and both buyers and renters are craving a home with its own outside space rather than a flat. Usually home-movers tell us the kitchen photographs are the most important when they’re looking at a property advert, but now agents should consider giving greater prominence to pictures of gardens and outdoor spaces to attract the attention of prospective renters and buyers.”
Demand for gardens isn’t a new thing
While it is easy to make a connection between the COVID-19 pandemic and house buyers looking for a property with a garden, it would be wrong to suggest this is a new phenomenon. Gardens have always been a popular feature amongst property buyers.
For 2019, Zoopla announced gardens was in the top three search terms used by prospective buyers looking for a home on their site.
A study by Zoopla and the Society of Garden Designers highlighted the leading features people want to see in their garden:
· Somewhere to sit and relax (36%)
· Maximum sunlight throughout the day / south facing (15%)
· Somewhere for the children to play (12%)
· Flowers / shrubs (8%)
· A space for pets (7%)
· Somewhere to entertain (6%)
· Growing my own fruit/vegetables (4%)
· Extra storage space/shed (2%)
· A water feature (0.4%)
Remote Working Demands Will Alter Market
While industry experts suggest the demand for gardens is the notable change in the housing market, there is a lot to be said for the impact remote working will have on the sector.
If people no longer need to commute daily, and will be required to have a reliable workspace at home, it is inevitable that buyer demand will change.
Some industry specialists predict this will lead to a mass exodus from London as people flock to rural areas. Some buyers will, but this won’t be the case for everyone. Not everyone is enamoured with a rural setting, and it is not as though people only live in London because of their work.
London life is about schools, communities, your favourite sports teams, entertainment hubs, restaurants, bars and every aspect of modern life. As an example, Forest Hill provides the best of both worlds.
There is a considerable number of parks and open space on offer, but people are also connected to one of the leading cities in the world. For those whose life is about more than just work, areas like Forest Hill will always be popular.
Mortgages have changed too
There has been a considerable focus on mortgages during lockdown, albeit much of this has fallen on mortgage payment holidays. With many property owners contacting their lender to enquire about mortgage holidays, and many lenders operating with a reduced workforce, something had to give.
There was a dramatic reduction in mortgage products, another factor which hampered the property market. Even if people were in a position where they could buy a property, their options in arranging a mortgage were limited.
However, with the property market back in business, and things moving forward across the country, mortgage products are returning. 77% of mortgage brokers expect lending to return to pre-pandemic levels within nine months.
This will be a slow process. It is believed around 350,000 sales didn’t conclude due to the market shutting down, which means there is an inevitable backlog to work through. However, there is a cause for optimism in some regards.
There is growth in the number of two-year fixed mortgage deals, for 90% LTV mortgages. Before the lockdown period, there were 431 products on offer, and this fell to 35 at the start of May. However, by the start of June, this increased to 61 products. This is a significant jump in a single month, but there is also tremendous scope for more products to come, which should assist people in stepping onto the property ladder.
At Hunters Forest Hill, we know selling property is challenging, but we are here to assist you in the process. If you aim to buy, sell, let your home or rent property, we are active in New Cross, Peckham, Dulwich and Brockley, in addition to Forest Hill, so get in touch with one of the top three agents in London, and we will be happy to assist you.