Resolute in Real Estate
It’s the time of year for reflection and resolving to do better. Off the back of the last year, I’m sure most real estate lawyers could just do with a good rest. However, I also know many real estate lawyers who descend into blind panic if they have a ‘quiet day’!
Off the back of the toughest year I can recall, even tougher than 2007 because of the added stressors created by Covid, it’s hard to know what this year will bring. Will the market crash and burn, what effect will the pandemic have, if any, will we have enough work to do…? Well, here are my predictions.
- Covid, omicron and other variants
Covid hasn’t gone away and, truth is, it probably never will. The current government strategy seems to be to try and ‘live with it’. Whether this approach will succeed remains to be seen but, whatever happens, we must be alive to the fact that Covid could well have further unexpected impacts on the property market this year.
- House prices
Prices have continued to rise in recent years and I expect this to continue. However, I anticipate that any increase will be smaller than in 2021. It would also come as no surprise to me if London prices stagnated a little, whilst other areas continued to rise – ‘levelling up’ without trying!
- Interest rates
In truth, we have been spoilt with interest rates at a historic low of 0.10% over the last year. With soaring inflation, I predict that interest rates will continue to rise throughout the year, though we must remember that they have started from a low level.
- Market activity
All of the above factors will have an impact on activity but the truth is that there is a shortage of homes and, whilst demand outstrips supply, the market will, in my view, remain strong. There has been fierce competition for homes recently, with prices agreed exceeding those asked for – again, I fully expect those properties in popular locations to continue with this trend.
Fortuitously, these have been at low levels in recent years but, with the after-effects of Covid, and the rise, and likely increase, in interest rates, this could well result in more lenders taking possession of properties.
- Hybrid working
As the dust settled following various regional and national lockdowns, businesses were beginning to adjust to a ‘new normal’. Despite current advice to ‘work from home’ if possible, we hope that this won’t last much longer. The benefits of working ‘together’ are immeasurable but working from home also affords the opportunity to obtain greater ‘balance’. I expect many workers to formalise ‘hybrid’ arrangements. It follows that green space, flexible/versatile accommodation and provision for home working will be paramount for many in choosing a property. So far as location is concerned, the migration to more rural areas will continue and the commuter belt will expand further. In addition, I also fully expect clients to be asking me about the strength and speed of the wi-fi and additional enquiries about gigabits becoming the norm!
Off the back of COP26, my view is that environmental issues will become more critical to home buyers this year. Ground source heat pumps, solar panels and electric charging points for vehicles will certainly feature on ‘wish lists’ for buyers – and long may this trend continue.
As mentioned, there aren’t enough homes to ‘go around’ and so innovation will be key. Rooftop extensions, airspace development and basement refurbishments are just some examples of new construction likely to have an impact on the 2022 market.
- Equity release
With the population living longer, pensions underperforming and many being ‘asset rich’ but ‘cash poor’, I predict an upwards trajectory for these products offering greater flexibility for those in retirement.
My predictions are just that – what I think may happen in 2022 and beyond. However, if you look at what I predicted in 2020, I’m pretty sure I didn’t envisage virtual incarceration at home and a global pandemic! My crystal ball clearly failed….
Predictions go hand in hand with resolutions and I resolve to continue deliver excellence to every client on every case, use technology wherever possible to make the client experience as fresh, fast, and faultless as possible and embrace reservation agreements so as to counter gazumping.
Primarily, my hope is for a year that’s busy, but not chaotic, and where property professionals, bruised and battered from last year’s ‘pinball’ – being propelled from one place to another, without time to think, can find their ‘normal’…or as normal as life can be in real estate!