There has been much speculation about how quickly the UK residential property market will recover from the economic fallout of the global pandemic and what that recovery might look like.
Many agents still report pent-up demand and a sense that buyers and sellers are gearing up to transact once the lockdown restrictions are lifted; Zoopla has stated that there are 373,000 transactions worth £82 billion currently on hold.
2020 had certainly started with quite a bounce as the months of uncertainty over the election and Brexit began to fade. But after the sudden arrival of such an unprecedented and sobering event, which will inevitably impact on the way we all live and work in the future, it is likely that we will see a shift of some description and the emergence of new trends across the different sectors of the residential market.
Time to make that move to the country?
London experienced the worst of the coronavirus outbreak in the UK, certainly in the initial weeks when the virus took hold. With the bars, museums and theatres of London that contribute so much to the capital's vibrancy closed, London was an eerie place to be.
Many of those with second homes in the country took flight before the lockdown was imposed. Those who remained in the capital for the duration, despite in many cases owning luxury apartments, will have been yearning for some outside space to call their own.
For those already contemplating making a move to the country in the future, the events of the last few months may well have caused them to pause for thought, and to kick-start their search with some purpose.
The appeal of moving to a house in a less populated area, where there is no need to rely on public transport, with a large garden to enjoy and easy access to countryside walks might now feel irresistible for some.
Many office workers are beginning to see the benefits of working from home and whereas previously some of these will have chosen to live closer to the office to cut down on commute times, priorities may now change.
For those working from home, lack of space and a decent internet connection have been the main barriers to successful and contented working. Those relocating will want to pay particular attention to the availability of fast broadband, particularly if they are drawn to more remote locations.
Changing priorities for private renters and buyers?
In part due to the high level of rents in London, many young professionals rent properties with friends in co-living arrangements. Lockdown has seen a strain put on many of these relationships as multiple parties try to work from home in limited space, often with no access to gardens or outside communal space.
Will such arrangements become less appealing in the future? Will would-be renters retain interest only in those properties which have access to a garden or a balcony/roof terrace or a designated study/office space?
The importance of outside space, particularly in cities, may mean that those properties that can offer it will attract an increasing premium and have a market edge in both the rental and sales spheres.
Similarly, those properties in London that provide access to private garden squares will take on additional appeal. Many luxury homes already incorporate private gyms and high-end developers will be looking to ensure that their new homes offer premium exercise spaces for their target buyers for whom the restrictions of lockdown will be a recent memory.
Renting versus buying
In the rental sphere, Zoopla has reported a surge in demand during the early part of April as tenants begin to gear up for potential moves. Will its flexibility compared to the sales market prove to be a draw, in a period of financial uncertainty following coronavirus?
Private renters can expect a greater supply as properties previously in use for Airbnb return to long-term letting use as demand for holiday lettings reduces in the short-term. It has been much easier for the lettings market to continue through the crisis than the sales market, as letting agents can still agree tenancies with delayed start dates and online viewings are easier with rental accommodation; very few home buyers would want to make a commitment to purchase a property without a physical viewing.
The same is not the case for many renters who are usually more prepared to gamble after a virtual viewing, and accept the possibility of some compromise.
The prime rental market has been boosted in recent years by many overseas workers who might previously have been potential buyers, deterred by increasing rates of SDLT, choosing to rent at the top-end of the market rather than buy properties that they might only hold for two or three years.
This trend may well continue as these workers consider the benefits of making an easy exit from London should the UK experience a further wave of infections.
Demand for student accommodation?
The student accommodation market is believed to have absorbed the short-term effects of the virus reasonably well, in part because much of the rent on this type of accommodation is generally pre-paid.
Much depends on whether students will be able to return to their physical classes in the autumn term, and also upon the reduction in numbers of international students taking up places at UK universities.
At the moment, the impact that travel restrictions will have on university admissions for the forthcoming academic year is unknown. Whatever the case, this sector has historically shown stability and resilience in the face of economic downturn.
A struggling economy tends to result in an increase in numbers as students decide to continue their studies rather than enter the job market at a time when the economy is fragile or in the early stages of recovery.
Domestic students and their parents will have been absorbing the impact of paying rent on unused accommodation and this may result in increasing numbers of those students looking to continue their studies from home.
Those who do take up places in student accommodation blocks will undoubtedly be seeking some form of flexibility should they be unable to use the accommodation they have paid for, should similar circumstances arise again.
Green spaces and community living
A sense of community has been stressed by many as being particularly important during the current crisis, as has the enjoyment of wildlife and green space.
Increasing amounts of wildlife are being observed and appreciated in our parks, gardens and streets. These priorities and the renewed appreciation of the impact on our health and wellbeing of enhanced biodiversity in housing projects is likely to influence planning policy and the way developers shape their new developments in the years to come.
Many families will have been particularly concerned about elderly relatives and reflecting on whether or not their current living arrangements have made it easy for them to be properly supported during the crisis.
Those who have been living active and independent lives may not have felt the need to live in the vicinity of their adult children up until now. Will there be added interest in properties that offer annex accommodation?
Senior living complexes that offer privacy and independence but the support of a community and proximity to local facilities may take on a new appeal for those who have been self-isolating in large houses, distant from family, friends and amenities.
It will be intriguing to follow the re-emergence of all strands of the residential sector in the coming weeks and months. Like many facets of our lives, the markets are likely to evolve in line with the shifting priorities of our post Covid-19 world.
There will be many challenges but for those who design, plan and build the homes of the future, also many opportunities to use the experience of the last few months to make positive and lasting changes to our communities.
*Lisa Bevan is senior counsel in the Private Client group at legal firm Taylor Wessing and advises on all aspects of residential property, including high-end sales and purchases, restructuring and refinancing, lease extensions and landlord and tenant issues.