Market update - July 2021
Amongst friends, I am not renowned for my punctuality. The intentions are good, but I suffer from an over-optimistic view of how much I can achieve in a defined period of time.
So, like me, July’s market update is here, just slightly later than expected. Although, fair warning, I did say that I might not be around last week.
After seven months of monthly market updates largely focussed on both the Stamp Duty holiday and the effects of the pandemic on property prices, we are now firmly entrenched in the new normal. Whatever that actually means.
Even in a post truth society, some things are undeniable. The market was incredibly buoyant for a 12 month period, spurred on by the five factors that were highlighted in June’s market update. People have been through a once in a lifetime re-assessment of home.
The short, medium and long term implications of this are becoming clearer too.
City vs Forest
This year London’s population is set to fall for the first time since 1988.
You can see the appeal of moving out. A bigger home, with more outside space. Less air pollution. Less noise.
In fact, just less of the rat race, and more of the good life.
You can imagine a time not too far in the future, where we all live in an Elon and Jeff controlled world of hyperloops, electric cars, super fast broadband and 30 minute drone deliveries, irrespective of your precise location.
Three to four days a week of virtual meetings, and maybe a day or two in the city. The office of the future is a place to collaborate, not to be chained to your desk by your demanding, paranoid boss. The introvert in me is more than a little excited.
However, it’s probably less appealing if you already live in one of these areas that city dwellers are dreaming of.
In South Hams, an area of outstanding natural beauty in Devon with more than 5,000 second homes, Anthony Mangnall, the Conservative MP for Totnes, is preparing to declare a housing emergency by the autumn.
“There are just 19 properties you can rent long-term in the whole of South Hams on Rightmove, yet there are 300 advertised on Airbnb in Salcombe, another 300 in Kingsbridge, a similar number in Totnes. Yet we have hospital staff who can’t find anywhere to live, RNLI crew that can’t live in the town they serve. This is starting to become dangerous.”
In the first six months this year, 14,660 second homes were bought in Britain according to statistics from Countrywide, the largest estate agency chain in the UK, which is the highest number since 2009 when they began collecting data. In some areas of the Lake District, north Norfolk, Devon and Cornwall, up to 80 per cent of houses are thought to be holiday lets or second homes.
Pandemics, perennials and privacy
Biosecurity. A word I’d never thought I’d mention in relation to estate agency. Yet in a post pandemic world, single family homes are considered safer than multiple unit buildings.
Similarly, lockdown syndrome has made us long for larger, more flexible outside spaces.
Think more of the open spaces of Wandsworth Common than the inmates yard at HMP Wandsworth.
Gardens to relax in, suitable for both children and adults, summer or winter. If 2020 was the year of the toilet roll, 2021 was dedicated to the panic purchasing of patio heaters.
Not forgetting of course internal space, and the separation of it.
Lateral living has forever been at a premium and historically, the closer you got to central London, the more this was apparent. Single floor apartments and two level houses were always more expensive than their vertical counterparts.
As our homes have become places of work, rest and play, separation becomes important again.
An office on a different floor to your living accommodation, or even better in a garden studio is better for deep, focussed work.
It might also help avoid the kind of problem which caused some uncomfortable moments for Professor Robert Kelly.
This isn’t another Jeff reference.
In the last ten years, but especially in the last five, London has seen the development of numerous high end apartment buildings.
Coinciding with this, the provision of hotel standard amenities has become a must have, and has led to the increasing popularity of branded residences, usually in collaboration with some of the world’s finest hotels.
They’re not exactly the same as one another, but they do have the most important features in common.
They’re also all aimed at the same demographic of buyers. Ultra high net worth, usually with multiple residences across the globe.
Most importantly, they’re as convenient as living gets, and time is the one asset that the UHNW community don’t yet have more of than anyone else.
It hasn’t happened yet, but perhaps demand for these types of homes will start to wane. Perhaps Westminster’s new policy is ahead of the curve, after all.
In an ever changing landscape, it’s going to be fascinating to see how this great city evolves over the next twenty years.
In the meantime, I’ll try to ensure that the July 2061 market update arrives in your inbox on time. If email is still a thing.
Things I’ve been inspired by this week
“A thousand years ago ancient Polynesian navigators embarked on the greatest sea voyaging known to man.
This came about by converting their higher purpose into a vision of what they could accomplish. Herein lay the mission they would embark upon.
Once the vision was clear, it was translated into a plan that was successfully executed one task at a time.
This remains our template for great accomplishments. The pursuit of its vision was a sacred experience for the tribe. The precise destination was unknown – it lay outside their knowledge; what mattered was the aspiration and the pictures they painted of what could be.
The detail of the journey would reveal itself as they went”