Both Rightmove and Knight Frank have published data in the last week stating that UK house prices have held firm against the recent odds. With house prices up an eye-raising 1.9% month-on-month in June (vs. March levels), the outlook, at least short-term, for the UK residential sector looks encouraging.
Following an eight-week freeze on activity, Knight Frank’s data suggests transaction volumes are bouncing back faster than expected as a consequence of the pent-up demand witnessed pre-Covid, with a 34% increase on the five-year average for offers accepted within London (data for week ended June 6).
We’ve already covered the strong shift in sentiment towards out-of-city properties with outside space and sufficient tech to facilitate working from home more in the future. The same figure for outside of London is reported as a whopping 52% increase.
At Hilltop we see the London commuter belt continuing to widen. Longer commuting times are easier to swallow if they have to be made less often and if they come as part of a more spacious, comfortable lifestyle. Of course, demand will always be there for correctly priced London property (some things never change), but the new norm heralds new opportunities elsewhere.
This week came news that the UK’s second largest mortgage provider, Nationwide, is to triple the minimum deposit for first-time buyers. Whilst we see this as a defensive reaction to the uncharted times we find ourselves in, it nevertheless reinforces one of the many challenges the UK housing market faces. The supply gap contributes to rising prices and demand becomes curtailed by affordability.
If buying a home is to become increasingly a lifestyle decision and an increasingly long-term purchase, the hard-pushed housebuyer is going to make damn sure that, when they undertake the huge financial commitment, the property they choose is going to tick as many of their boxes as possible.
Our ethos has always been the right project in the right place, with the right sponsor and now we add extra importance to the lifestyle factor – better building solutions, flexible space, smarter tech. Regulations have, to a point, already enforced better building solutions, but the canny SME developer from here on will be the one that focuses on ‘future-ready’ projects – building for a lifestyle, not just for a dwelling.