James Max

Did anyone get their predictions for the 2020 property market right? I suspect not. We’d barely heard of Covid back in January last year and, if we had, we would have probably written off the housing market for half a decade. But look at property now. Prices are up 5 per cent on average and so too is the volume of sales: £62 billion of extra transactions according to Zoopla compared to 2019. And that's despite the economic hit we've experienced over the last year. I’d suggest the upward trajectory will continue, albeit with a few wobbles. This market movement is being driven by macro factors, not local ones. Low interest rates and economic optimism surrounding a 2021 vaccine could mean continued growth.

Why, Sir, you find no man, at all intellectual, who is willing to leave London. No, Sir, when a man is tired of London, he is tired of life; for there is in London all that life can afford.— Samuel Johnson Samuel Johnson made this remark in 1777 to one of his friends who lived in the wilds of Scotland. Covid, the internet and cars hadn’t happened at the time. But he did have a point. Many office workers have been told they are unlikely to return to their places of work this side of Christmas. And when you do return, it is likely that home working could be on the cards at least one if not two days a week. If that’s the case, do you really need to live in a central city area?

The latest research from Deutsche Bank suggests that a dramatic shift in working patterns is on the way. 57 per cent of the 450 financial workers surveyed expect to be working from home between 1 and 3 days a week once the pandemic has passed. Covid-19 has not only disrupted our lives in the short term but is changing our longterm mindset. So, what does that mean for the property market? If you think it’s back to business as usual, you’ll need to redefine usual before you proceed. Our new reality now affords office workers the opportunity to live further away from their place of work, which in turn brings the prospect of more space.

For those looking to buy or sell houses, lockdown has put many of the best laid plans on hold. Since lockdown was imposed on the 23rd March, the property market has entered into a period of suspended animation. We don’t know when lockdown will end, nor what the financial and economic collateral damage will be for the UK economy and we certainly don’t know what the ‘new normal’ will be or how long it will have to go on for. So, what do we know? Financial markets, although initially taking fright, have recovered somewhat. Falls of between 10 and 15 per cent across indexes around the world with markets seeming to have stabilised. At least for now.

It’s easy to look with doom and gloom at the Coronavirus situation and imagine that this could be the death knell for the property market. Why would you make the biggest investment in your life at a time of great economic uncertainty? Furthermore, the government has requested that the market effectively shut down while we fight this pandemic. In the short term, will there be disruption and pressure on pricing? Yes. In the longer term, is the market doomed? I am going to stick my neck on the line and say that property is set for a strong recovery. Before the pandemic struck there was a shortage of supply and an increase in demand for good property. That dynamic has not changed.

At first glance you could be forgiven for thinking that Labour’s publication ‘Land for the Many’ is a set of policy ideas that solves the housing crisis. Increasing the supply of affordable housing and freeing up land to build, improving access to existing stock and transparency sounds fair, right? Yet tucked away inside the report, you’ll find a range of measures that could pull the market as we know it to pieces; it’s the most radical sets of property proposals since the mass building plan after the Second World War. The report’s editor, George Monbiot, has not thought through the unintended consequences of the proposals. Just one example and perhaps the most damaging is the desire to reduce land prices.