Property: Rush to the country as COVID cuts commuting
Residential property experts including TV presenter Kirstie Allsopp discuss the latest changes, challenges and opportunities.
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The need for more space as working from home becomes more common could considerably boost residential property sales in the country.
That was the view expressed at a virtual property event for Coutts clients held this week. Four experts took questions about how the coronavirus pandemic has hit the market, and what it could mean for buyers and sellers.
Lucian Cook, Director of Residential Research at Savills, said, “The number of people looking to buy a prime property in the country is 50% higher now than it was before the coronavirus crisis. Working from home is changing priorities. There is a strong demand for accessible countryside. And it comes at a time when village and rural properties are looking like good value compared to their city counterparts.”
Space becomes key when working from home
Coutts Head of Specialist Lending Helen Keen said this presented “a great opportunity” for people to reflect on what they needed.
“A lot more working from home means space becomes a lot more important,” she explained. “So this becomes a really good time to think about the space you have and the space you need.”
Kirstie Allsopp, presenter of Channel 4 property shows Location, Location, Location and Love It or List It, said the number of people commuting from the country into cities could drop by around 20% as home offices become more commonplace. She said, “I think people are assessing the way they live their lives and do their jobs, and the flight to the country is very, very real.”
Luxury London prices good value
There is still plenty of activity and opportunity in the luxury property market in London, though.
Lucian Cook said, “Surprisingly, demand in London has recovered incredibly strongly as people look for space not only in the countryside, but also in the established wealth belts within the London market.”
Noting that prime central London prices had fallen -1.2% in the last quarter, and -17% over the last five years, he said “the market is looking pretty good value in an historic and international context”.
He added: “And that’s as we wait to see the easing of travel restrictions, which I think is probably going to be necessary for that market to kick off.”
Residential property market recovering fast
The Savills director also told the audience that the strength of the property market recovery post-COVID was “really surprising”.
“In April, the number of sales in the UK fell by something in the order of 83%,” he said. “But we’ve seen a progressive improvement week-on-week to the point where last week sales were 26% over what they were in June last year. And for property over £1 million, the recovery has been even stronger, with the number of transactions 48% over where they were last June.”
He said house prices across the UK were expected to fall -7.5% this year, but rise 5% next year, 8% in 2022, and 15% over the next five years. Reasons for the recovery were thought to include low interest rates and government action to support jobs through its furlough scheme.
The future is still unclear
George Hammond, Property Correspondent at the Financial Times, said there were still too many unknowns to be sure where the residential property market would go next.
In his view, “A lot of the economic pain has been saved up by the government’s intervention. When that comes through, we’ll know more.”
And when asked about buying property as an investment, Kirstie Allsopp added, “At the start of all this there was so much talk about the ‘V-shaped recovery’, but we don’t know how sharp that V is going to be or whether it’s actually going to be a W.”
UK still attractive for international buyers
The panel was unanimous in its belief that the UK would continue to appeal to overseas buyers, despite recent talk about the end of globalisation.
In George Hammond’s opinion: “Buyers coming from China through Hong Kong recognise the legal system, but also think this is a safe place to be in terms of where to put their money. It’s a known entity for them.”
Helen Keen added that the International team at Coutts had been “crazy busy” this year working with international property buyers.
“I can’t see London diminishing in terms of its importance as a global city,” she said. “And the exchange rate benefits have made it very attractive.”
Our creative approach to lending
When asked about Coutts’ current attitude towards mortgage lending, Helen Keen summed it up well. “We’ve always been very generous and creative in the lending space,” she said. “A lot of other banks have pulled products in recent weeks, but we haven’t.”
To find out more about how Coutts could help you with your property needs, speak to your private banker or call Coutts 24 on 020 7957 2424.
Your home or property may be repossessed if you do not keep up repayments on your mortgage.
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We’re committed to supporting clients who may be affected by coronavirus and have robust plans in place to minimise any disruption to our service.
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