Making sense of the house price predictions seems to be very 50/50 at a first glance between whether the market will nose dive or rise. However, a second glance can start to make sense of the statistics in a way that we’ve seen developers latching onto, and fast.
Let’s dive in…
There have been many terms that have become the norm during the past year and subsequently ‘broken-plan living’ is looking set to be the next one for developers.
It has been nearly a year now since the start of the COVID-19 pandemic, and during this time, life for all of us has changed almost beyond recognition. However, as a result of the changes forced upon us, a new trend in home working is likely to continue, even as the pandemic comes to an end (let’s all hope that’s soon).
Lockdown, whatever number lockdown period we are now in, has proved that working from home is viable. Many employers are already weighing up the option of allowing more of their staff to work from home on a regular basis, so in turn this will encourage homeowners to seek out more space. However, I for one thoroughly look forward to the day I can step foot back into the MSP Capital office and physically work alongside my colleagues once again. Not long now …
While private gardens have already proven to be an increasingly important factor for homeowners in making a decision to move, so too will be more space for home offices, hopefully along with the required digital connectivity.
Residential Developers quick to act
Residential developers are an innovative bunch, and they’ve been quick to see this new trend. Indeed, it has been evident from a number of recent new residential development schemes MSP Capital are funding, that developers have been quick to change their product to meet their prospective buyers’ demands.
Open-plan living has been one of the biggest trends in homes in recent decades, but during lockdown, it is clear to see that it has its disadvantages. Working from your laptop at home on your kitchen or dining room table, whilst also trying to manage home life with perhaps your children or partner, who themselves may also be studying or working from home, does not really sit well with your many video calls with clients and colleagues during your working day. I’m sure we all have an embarrassing story or two to tell as a result though.
Residential developers have thus started the move towards broken-plan living, thus incorporating dedicated working spaces in new homes. These new broken-plan layouts may include snugs, studies, and television rooms instead of large lounges. Split-level floors and sliding partitions are also among some of the other features being utilised in designs to help divide open spaces.
There, of course, still remains buyer demand for good-sized kitchen spaces featuring large countertops for entertaining guests, but families are now favouring the broken-plan layout that offers more privacy for using personal mobile devices for example.
It’s here that we can see the potential clash of predictions. Judging on what we can see going on in the development world it might be sensible to suggest that these larger styles of properties with land will rise whilst their smaller counterparts will not. Would that be enough to cause a crash though post-covid? As life returns to normal again and people return to the cities over the coming few years, will all of these other properties be snapped up in a buy-to-let/first-time buyer frenzy?
As always it’s impossible to predict, but essential to stay on top of the buyer’s potential trends.
Here’s the data that’s driving the debate:
The Land Registry says the price of a property in the UK increased by 1.2% month-on-month and 8.5% year-on-year in December, to reach £251,500.
Nationwide’s index (based on mortgage lending) reported a 0.3% monthly drop and 6.4% annual rise in prices in January. Halifax (also based on lending) reported a 0.3% monthly drop and 5.4% annual increase.
In terms of future house prices, Which? summed up the data perfectly, you can see what drives the division in predictions here:
- Rightmove forecasts that house prices will rise by 4% in 2021. It predicts a lull in the second quarter of the year once the stamp duty cut ends, but says this won’t be ‘make or break’.
- Zoopla predicts annual house price growth will reach 5% in February, before slowing to 1% by the end of 2021.
- Halifax says house prices will fall by between 2% and 5% this year.
- Estate agents Savills and Hamptons both believe house prices will stay the same in 2021. Chestertons predicts a 1.5% increase and Knight Frank a 1% rise.
- The Centre for Economics and Business Research (CEBR) predicts house prices could fall by 5%.
Wouldn’t it be interesting to see a demographic sheet for the specific property transactions or lack thereof that they’re basing their data on? Ultimately though, only time will tell whether this new trend is here to stay for the foreseeable future.