Mystic Mel (and her property predictions)
It’s fair to say that neither my crystal ball nor my magic wand have been very effective in recent months. In fact, I think I have misplaced both…
As the stamp duty land tax (SDLT) holiday (who on earth described this as a ‘holiday’!) ends, albeit with taper relief in place until September, one thing is for certain, and that is that there has been no ‘cliff edge’. New business has slowed a little, but it’s gradual and there’s still plenty to do – we certainly won’t be twiddling our thumbs in July…
I’ve reflected on the last 15 months – and what a 15 months it has been. The big question is – what happens next? Here are my thoughts:-
As mentioned, there remains an incentive to move before the end of September and so, whilst I expect a slowdown in July and August (particularly given the summer holidays), there will be an inevitable “September surge”. Combined with the anticipated “Christmas chaos” in December, this will mean more exaggerated peaks and troughs in the quarter months for 2021. Life will continue to be a rollercoaster!
My feeling is that the SDLT holiday has inflated prices, and it’s been really interesting to see (and I know this because of my Rightmove addiction) lots of ‘price reduced’ against properties – a sign of things to come? I’ve also had first-hand experience of price renegotiations because of the failure of the chain to meet the SDLT deadline, not due to me I hasten to add! In fact, one deal has completely fallen apart as a result of it. Prices fell 1.9% from March-April 2021 but were up 8.9% in the last year. I think that prices will fluctuate a little over the coming months but then stabilise. In addition, there will be regional and geographical variations for sure.
One thing that has remained constant in everything we’ve been through since Covid appeared is that there remains a chronic housing shortage nationwide. In short, there aren’t enough properties to go around. Agents’ books are pretty bare right now and I think it’ll take some time for them to be bursting with properties. There needs to be firm and unwavering commitment to house building. I think that this will come and I expect more new homes to be built and for this sector to be in the ascendancy.
As ‘freedom’ day approaches, and office workers establish a new normal, with many continuing to work from home, or trialing hybrid arrangements, I expect to see a continued demand for outside space, home offices and less of a focus on proximity to stations. Greater freedoms at work will enable greater flexibility at home. I’m not expecting a mass migration to the coast or rural enclaves; more an extension to the conventional commuter zones.
Interest rates remain low and I expect this to continue, in the short term at least. Whilst money remains ‘cheap’ to borrow, there will be strong activity in the market.
This being said, the furlough scheme will shortly be coming to an end and a rise in unemployment is likely – this will counter the above.
It’s clear that the pandemic has had a disastrous effect on pipelines and that the average period from offer acceptance to completion has increased dramatically. In the 21st century, and with the technology available, this really shouldn’t be the case! I’m optimistic that lower volumes of work, and all stakeholders having made the adjustments necessary to deal with Covid, will have a positive effect – a win for everyone involved.
Dealing with lenders in the pandemic has been, well, how can I put it… both ‘varied’ and ‘interesting’! There have been some lenders who have really delivered in terms of service, but others? Don’t get me started! It is simply not acceptable to be on hold for hours (yes, hours) to speak to someone, nor is it acceptable to send mortgage offers by post only and not email… Perhaps those bank and building society employees who are charged with chasing lawyers for the completed registration 5 minutes after the purchase has completed could be ‘redistributed’!
Sadly, I think many good property lawyers will have decided that ‘enough is enough’ and will retire, retrain or leave the law entirely. This is sad but there have been unbelievably tough conditions and the mental health of many property professionals has been stress tested to the absolute limit. Many will think that what I do is ‘easy’ – the phrase “come and have a go if you think you’re hard enough” comes to mind! Despite the advent of amazing technology, life is tough at the coal face – not only do you need to be an expert in land law, but a confidante, a counsellor and, in some cases, a psychic… and all of this needs to be done yesterday.
However, if we’ve learnt one lesson over the last year or more, it’s that life is inherently uncertain and unpredictable – think of the phrase “it would be inhumane to cancel Christmas”, followed by the cancellation of Christmas… enough said!
I toyed with the idea of a “Covid” heading but, of course, I can’t predict what happens next. My predictions above are based on the continued success of the vaccination programme, increased herd immunity and our scientists being proactive and nimble as against new variants. And no winter lockdown…
It’s been a gruelling year and there are many parts of it that I sincerely hope that I never have to repeat (though I have just had THAT email from my daughter’s school about a Covid case – deep sigh), but there are lessons to be learnt, and ‘good stuff’ to keep doing.
I’m sure that there will be more challenges around the corner and that we are heading into a period of volatility – the ability to be both flexible and agile will be key to success. We need to embrace all that technology has to offer but not lose that human touch, safe in the knowledge that we’ve just come through the most stressful of periods.
To all real estate layers – well done, we did it!