The Covid-19 pandemic continues to have a huge impact on all our lives, with all schools now closed (other than for the children of key workers), social distancing measures in place, all non-essential travel strongly advised against, and the forced closure of restaurants, bars, pubs, gyms, theatres and other public venues.
In the Prime Minister’s latest address, he put the country into effective lockdown by saying people could only go out for four reasons: shopping for basic necessities, one form of daily exercise (a jog, a walk, a cycle, etc), any medical need including visiting vulnerable relatives, and travelling to and from essential work.
But what impact is coronavirus having on the development world and the growing retirement village market? Below, Property Investor Today checks in with Charlie Baxter, the managing director and co-founder of Alchemi Group, and Andrew Fyfe, managing director of retirement agency Sovereign Property Partnerships, for their thoughts on these two key parts of the property sector.
Practical measures and pent-up demand
Baxter says Alchemi Group, the award-winning team behind the transformation of Westminster Fire Station, is taking a number of practical steps in response to the coronavirus outbreak. “Like many London businesses we’ve asked our team to work from home until further notice, while keeping visits to the Westminster Fire Station site to a minimum and making greater use of FaceTime,” he said.
Certain measures have been put in place to shut down activity on-site at Westminster Fire Station, too. “Some of the products we are using for Westminster Fire Station are coming from overseas - including European countries currently affected by the coronavirus - and in anticipation of delayed deliveries we’re working closely with our contractors to consider resequencing of programmes to mitigate delays,” he added.
But have there been any changes in buyer, seller, landlord and tenant behaviour as a result of the virus? “The Central London sales market was off to a strong start at the beginning of the year and with a lack of quality, bespoke new-build homes on the market, we experienced a significant increase in enquiries for our Westminster Fire Station development,” Baxter commented.
“This was felt particularly after the recent Budget announcements which set the clock ticking for overseas buyers keen to complete purchases before next April when a 2% surcharge in SDLT will be levied. As our Westminster Fire Station development is due to be launched at a time which will coincide with this change, we’ve been building a healthy list of interested purchasers. The coronavirus has, however, clearly paused this interest as people rightly prioritise health and family.”
Unsurprisingly, Baxter thinks the pandemic will affect the residential property market in the short-term, but believes it could bounce back if things calm down again soon.
“The pandemic will certainly delay what was building up to be a strong spring market. However, we expect there to be pent-up demand that will make for a busy summer – if the virus subsides with warmer weather,” he said.
“The recently reduced interest rates should lead to cheaper borrowing costs which will also increase purchaser appetite. The government has recently written to the Mayor lamenting the very disappointing average of 37,000 homes a year being built in London right now – against a target of 65,000 a year. This may lead to a significant pent-up demand and supply imbalance later this year.”
Lack of accessible information for retirees over housing options
With the UK’s ageing population growing, and this demographic particularly vulnerable to the current Covid-19 outbreak, Andrew Fyfe believes where and how people will live in later life is a growing concern that needs to be addressed sooner rather than later.
The population of Scotland’s pensioners, for example, is set to increase by a quarter (25%) by 2041. According to the Scottish Government, people have a general preference for remaining at home and as such it has a longstanding policy of ‘shifting the balance of care, supporting people to remain at home independently for as long as possible, rather than in care homes or hospitals’.
Fyfe says this is a positive assertion, but not everyone will be able to practically maintain a family-sized home in later life, for various reasons, and knowledge of what other options are available is essential.
However, easy to access information about housing options and guidance on later life decision- making is relatively limited at present, Fyfe claims.
The Elderly Accommodation Counsel (EAC), an independent charity, is seeking to address this issue through the creation of its Housing Options for Older People (HOOP) tool.
The EAC is working together with the Sovereign Property Partnerships to help facilitate the flow of information between retirement information providers and those who are seeking it.
On the coronavirus, which is currently such a concern to the older population in particular, Fyfe says: “I would suggest Covid-19 is an unavoidable and unique (well, hopefully!) event. Given the government’s stance for over-70s (i.e. to isolate) social carers who visit homes might not have the flexibility to do this anyway and as such it would be difficult to make a case for a better social care system having a significant impact on helping those infected. It is likely they would have to be hospitalised anyway under the circumstances.”
He added: “Generally, I understand that per person, Scotland and Wales offer a higher allocation in monetary terms towards social care. Scottish policy is working towards integrating health and social care to ensure there are less unnecessary trips to hospital, etc, by providing a more streamlined and married up service.”
He said the idea is to promote overall health and wellness as opposed to simply dealing with cases as they arise and to minimise costs where possible. In this way, more people can keep themselves healthy and reduce financial and workforce strain.
“In terms of how this (Covid 19) might affect the property industry, in my view this is another example of where integrating ideas from countries like Australia and America might help with care-and wellness,” Fyfe continued.
“If, for example, we had purpose-built housing in the form of retirement villages like the aforementioned countries, there would be relatively isolated communities of older people, with access to care on-site should they require it. In this case, where this demographic are most vulnerable to the disease, if we had this type of community, it would be relatively easy to control flow in and out and thus protect those within it from exposure.”
Our sister sites Estate Agent Today and Letting Agent Today are running a daily Conquering Corona series, offering advice and tips on how to mitigate the business impact of the virus, while a short-let company has agreed to open its homes to key workers for free during the coronavirus crisis – just one of the many acts of kindness we have seen in the industry of late.