Covid, or at least the measures introduced because of it, have certainly caused massive changes in the property market. They have set the market on fire, spurred unprecedented demand to buy, unprecedented sales levels and pushed prices to new heights.
The big question many of those in the industry would like to know the answer to, however, is whether Covid will change what buyers and tenants want permanently. If it does everyone in property will certainly need to prepare for some big changes in the years ahead.
Will Covid change where buyers and tenants want to live? Will it change what makes a good location?
Location, location, location has been something of a mantra for years. Places with good access to city centres and good road/rail links to them have generally been more in demand.
That could change in future, with more people either working more from home or in out-of-town commercial locations. So city centre homes and some suburban locations might not be as popular. While other suburban places could be more attractive.
Covid also spurred something of a flight to the country. So many rural locations could be more in demand. Some desirable rural locations could develop even more severely stressed property markets. (Cornwall is a case in point here.)
Last year housebuilder Redrow suggested that it would be downsizing its operations in London to focus on the regions where it could make a better return by building larger homes with more green space.
This report quoting Nationwide research suggests that even younger buyers (18-24) are now looking at living in more rural areas.
Will Covid change what types and sizes of home people want to buy and rent?
In the past, more compact properties that were easier and cheaper to run tended to be more popular with buyers and tenants. But spending more time at home has caused people to reassess how much space they need and the layout of their home.
Much has been said about homeworking and how it has prompted people to want more space at home, and a layout that allows it. But space is not just about homeworking of course. Many people can’t actually work from home either. More space at home could also become more sought after for social and leisure use too.
Will bigger become better in the future? Will people decide that small properties don’t really meet their needs anymore?
Research last year by letting agency Belvoir suggested that rental houses had become much more popular than flats. It also suggested that the shared/HMO property market was uncertain.
A garden – now seemingly rebranded as outside space – seems to be top of buyers’ and tenant’s wish lists at the moment. At one time a large garden might have put many off.
In this RICS survey 83% of respondents anticipated demand increasing for homes with gardens over the next two years and 79% predicted rising demand for those properties near green space.
Where might this leave properties without any?
Open plan layouts have become fashionable in recent years. But they’re not that practical when different family members doing different things are all at home.
Features like home offices and home gyms could become the next must haves.
Pet ownership has also become more popular. Dogs especially need more indoor and outdoor space. Rental homes that allow and have space for pets could become more sought after.
Will Covid change the amount people have to spend on their home?
This is an issue that, it’s fair to say, has probably been overlooked by many. But could Covid prompt people to reprioritise their finances towards house and home?
The last year has perhaps shown people just how much they were spending on things like holidays, entertainment, socialising outside the home or perhaps expensive car finance .... on a car they mainly use for commuting to work. It’s not unlikely lockdown has prompted more people to consider that they could divert some of this money to buying or renting their home and improving and furnishing it too.
This report suggests that £110 billion has been spent on home improvements since Covid began.
Will Covid change how often people move? Will ‘improve rather than move’ be an increasing trend?
It’s fair to say that moving has been something of a national institution in recent decades. The idea of the housing ladder, which everyone moves up, is well entrenched.
But could Covid have prompted people to reassess whether this is actually such a good idea? The recent housing boom has shown that moving home can be an expensive and fraught business. There are also other factors at play where too, such as the economy and future employment levels.
Covid has also perhaps prompted people to value the security and safety their home affords and that staying put could be a better option to climbing the ladder.
This reinforces the idea that house owners might decide to improve rather than move home – something that happened in other tricky housing markets in the 1990s and after 2008. Tenants might decide to stay put for longer or look for lets where it is possible to do so.
Research by PwC suggests 20% of people say they are now less likely to purchase a home over the next couple of years compared to in February 2020. (But 10% of people are more likely to do so.)
Could this filter through to changing patterns of demand for property? Or work its way through to future price and demand levels?
The big question to ask of course is will any of this happen? Will any or all of these changes actually become permanent and change what buyers and tenants want for good? Or will things gradually drift back to be more like the kind of sales and letting markets we’ve seen over the last few years. The answer is that it’s really difficult to say right now. However it’s clear that everyone in property really should keep an eye out for possible changes in buyer and tenant demand into the future.