The property predictions for 2021 continue to roll in, as the sector looks ahead to the upcoming 12 months.
Here, we get the thoughts of leading property developer GRE Assets and leading, independent buying agency Black Brick, on where the market will go next year.
A promising start to 2021
GRE Assets believes that, with pent-up demand after Lockdown 2.0 and promising news surrounding a Covid-19 vaccine, the UK property market should expect an encouraging start in 2021.
Michael El-Kassir, managing director of GRE Assets, which specialises in residential property development and regeneration in strategic locations across the UK and Spain, below explains what the company has experienced in the latter half of 2020 and how he believes this will inform the market as we approach 2021.
“As 2020 draws to a close, the market is showing continued growth with interest from both buyers and renters in new-build developments located in towns and cities undergoing major regeneration,” he comments.
“This trend directly aligns with our criteria for identifying investment locations which offer affordability, transport connections and ongoing regeneration, as seen in our Ashford and Peterborough projects.”
He says, with the imposed lockdown restrictions meaning people have spent much more time at home this year, this has led to a distinct rise in the number of people seriously considering their next property move.
“Low interest rates, the existing Help to Buy scheme and stamp duty incentives have also created a sense of urgency,” he adds.
“The pandemic has been a wake-up call for prospective buyers and renters, who have reassessed their priorities when looking for their next home. Not only are they spurred on to make the leap from London, they also recognise the importance of having access to green space, whether that is nearby parks, balconies, terraces, and gardens.”
El-Kassir also points to the vast shift in the working world, as employees and companies have adapted (in many cases seamlessly) to working from home.
“While people will return to the office as the latest restrictions ease, we strongly believe businesses will continue to work flexibly moving forward, meaning adaptable space and connectivity at home is of high importance for new homeowners,” he explains.
“At GRE Assets we pride ourselves on delivering high-quality, well-connected homes which respond to residents’ long-term and short-term needs. Our Riverside Park project in Ashford is a great example of this. The provision of outdoor space, Hyperoptic broadband and space to work from home has proven to be especially popular in 2020, and we are confident this will continue into the new year.”
In particular, he thinks the South East will continue to be one to watch in 2021, with GRE witnessing increased demand and lack of supply in this area post-lockdown.
“While UK-wide we have seen a rise in house prices and activity, it is the South East that really stands out,” he insists.
“The region offers the near-perfect package of high-quality, affordable homes in popular regeneration areas with excellent connectivity to London. Demand here is currently outstripping supply, which is something we intend to continue to address as we head into 2021.”
The company already has properties available in Ashford, and is exploring other opportunities across Kent and the wider South East, to ensure its clients ‘receive the best investment options’.
GRE Assets also anticipates that the recent news of the successful Covid-19 vaccine trials will kickstart a positive wave from house hunters, as people can start to see the end in sight and are, as a consequence, more confident about planning ahead.
“Even though we know the vaccines will not be rolled out to all for a number of months, it is enough to give people the hope they need to start their property searches. The news is likely to provide a green light for people that were previously apprehensive and boost buyer confidence within the market as we move into 2021.”
GRE Assets has a number of key developments in its UK portfolio, including Nene Wharf Apartments in Peterborough, Riverside Park in Ashford, Brighton Marina, City Tower in Reading and One Smithfield Square in Manchester. Additionally, it can point to Brises Diagonal Mar, Bac De Roda and Morales in Barcelona.
As well as its UK operations, the Oxford-based property development and investment company has an ever-expanding international operation, with additional offices in Riyadh, Dubai, Barcelona and Madrid.
Predictions and trends for 2021
Black Brick, the well-known independent buying agency founded by Camilla Dell in 2002, which provides expert advice to buyers in London, the Home Counties and the South East, recently released its December 2020 newsletter, in which it outlined its main predictions for 2021.
Below, we take a closer look at the key takeaways.
Q1 2021 – expect the unexpected
Black Brick’s managing partner Dell and partner Caspar Harvard-Walls expect a bumpy outlook in Q1, with the expiry of the stamp duty holiday on homes worth up to £500,000, the introduction of a 2% foreign buyers’ surcharge, speculation over changes to Capital Gains Tax in the spring Budget and adjustment to life outside the EU all making things a potential rollercoaster ride for a while.
The ’greening’ of the real estate sector
The company believes buyers will become more sensitive to whether a building is ‘green’ enough. For example, are the building materials sustainable? What is the home’s carbon footprint? And what is its energy efficiency rating? (The latter is already a factor important for landlords because of regulations surrounding minimum energy efficiency standards).
The agency thinks developers will need to look at how they can incorporate this growing sustainability trend into their schemes, with ‘super-prime’ developments likely to be marketed on this basis.
“Being green will overtake being swanky,” Dell says.
The 15-minute city
The likely continuation of working from home and the shift to online shopping points to the need for a more unique high street experience, close to home rather than the office, Black Brick predicts.
This dovetails with the rising trend of the ’15-minute city’, which the agency expects to rise to further prominence in 2021 – helping London to become greener in the process, too.
The 15-minute city is a concept, being considered across the world, which puts forward the merits of a decentralised city, without cars and where everything can be reached within the magic 15 minutes on foot, by bike, or by public transport.
Carlos Moreno, a scientific director and professor specialising in complex systems and innovation at University of Paris 1, and Parisian mayor Anne Hidalgo’s special envoy for smart cities, said of the 15-minute city concept: “At its heart is the concept of mixing urban social functions to create a vibrant vicinity.” Paris’s City Hall is attempting to turn the French capital into what Moreno calls a “city of proximities.”
Moreno’s 15-minute concept was developed chiefly to reduce urban carbon emissions, reimagining our towns ‘not as divided into discrete zones for living, working, and entertainment, but as mosaics of neighbourhoods in which almost all residents’ needs can be met within 15 minutes of their homes’.
The idea being that, as workplaces, stores and homes are brought into closer proximity, street space previously dedicated to cars is freed up, in turn eliminating pollution and making way for gardens, bike lanes, and extra sports and leisure facilities.
This enables residents to bring more of their daily activities out of their homes (which in major cities, including London, can sometimes be small and cramped) and into ‘welcoming, safe streets and squares’.
The concept is far from novel, but the idea of the 15-minute city has really caught on as a brand – and a philosophy – with authorities in Barcelona, Detroit, London, Melbourne, Milan and Portland all espousing similar visions to the Paris blueprint.
Covid-19 has helped to highlight the potential need for 15-minute cities, with commuting becoming a thing of the past for many people and cities left empty by a lack of workers and tourists.
With globalisation potentially receding as a result of Covid-19 – and other events such as Brexit and climate change – the idea is to reform and rethink cities as destinations primarily for ‘people to walk, bike and linger in, rather than commute to’. This recent Bloomberg article explains the phenomenon in more detail.
Mark Sutcliffe, of smarttransport.org, writes of the concept: “Instead of sucking workers, shoppers and students into congested city centres, the 15-minute approach devolves the provision of day-to-day needs to a neighbourhood, so nobody needs to travel more than 15 minutes to earn a living, buy food, see a doctor and educate their children.”
During the lockdowns, huge swathes of Central London streets have become more pedestrianised, including Regent Street. Black Brick also points to buyers already seeking out leafier suburbs ‘with character high streets’.
The agency believes high streets outside Central London will be an important driver of the post-lockdown economic recovery, with 41% of all London businesses located on high streets and their immediate surrounds, and 28% of all jobs in the capital.
“St John’s Wood is an obvious example of a 15-minute city within London, providing one reason why house prices have risen so drastically this year. White City is moving in this direction, with the new Television Centre development, while Richmond, Dulwich, Hampstead and Chiswick are all good examples, too,” the agency claims.
A year in transactions
Black Brick says that, despite the many challenges of 2020, its team still acquired £59,077,000 of property with 19% of this off-market. What’s more, on average, it saved its clients 7.1% when buying a home.
You can see the full Black Brick market update here, where it outlines its highlights and best transactions of 2020 and goes into greater depth about the possible greening of our cities, including the creation of communal gardens and garden communities.
<!– –> This post has originally been featured in Property Investor Today.