It's been another busy year for those with a stake in the UK property market, with commercial to residential transformations, Build to Rent, the growing prevalence of property scams and property fraud, record auction results, planning permission battles, and major new housing schemes across the whole of Britain just some of the trends that we've witnessed throughout 2021.
But what could 2022 bring? As ever, predicting property trends isn't an exact science, but here's what some of the country's leading property experts think.
"The property market across the board will be affected by the challenges surrounding sustainability. Current and pending legislation, outlining targets for all private rented homes to be at least energy rating EPC C by 2025 will be costly for many private and estate landlords, particularly in older converted homes or period properties," Lisa Simon, head of residential at Carter Jonas, said.
“There are still lots of unanswered questions surrounding this minimum standard, which the government will need to address, such as whether improvements will be tax-deductible (as it’s likely they will be classed as capital expenditure), whether certified tradespeople exist to carry out these improvements and what exemptions may be put in place for older or period properties where retrofitting is not financially feasible.”
She goes on to say, “Naturally, there needs to a conscious effort by the whole sector to reach and exceed sustainability and Net Zero targets, but the hope is that these should remain fair and achievable for landlords who play an important role in providing a service to renters.”
She also says that other legal requirements for new builds, such as electric vehicle (EV) chargers, may also apply to rented properties too as the UK Climate Change Committee (CCC) looks to achieve its goal of electric vehicles only by 2032.
“I think it’s likely there will continue to be a shortage of rental properties that will impact rents and I anticipate rents will carry on rising. Tenants who took advantage of low pandemic rents may see big price increases when their current tenancy comes to an end, as landlords may look to increase their rent if they wish to extend or renew,” Simon adds.
“The appetite for more space to accommodate home working will continue to fuel sales demand. London and City centre homes will increase in popularity again as people will start remembering what they loved about city life and may find their commute to work harder if they are required to come to the office more than two days a week in the new year. It will depend on how quickly in the new year the variant strands of Covid are kept under control.”
She continues: “Naturally there will be more appetite for properties with eco-credentials as more people become concerned about their carbon footprint and the government continues to rightly so, push the agenda. As well as increased demand for new build homes which are generally more energy-efficient, there will be continued delays with new homes coming to market due to shortages of building materials and labour.”
Meanwhile, Jacques Bingham, director of prime developer Harbright - which launched its first development outside prime central London this year at Whitelocke House in Hounslow, West London, an office to resi conversion - has predicted that there will be resilience in current yields in 2022, with tenants looking to stay put creating a supply shortage of good rental stock.
“New entrants and investors to the market will find yields squeezed in the second half of the year, with the shortage of supply and backlog caused by the pandemic and also supply chain pricing delays. There will be a final rush of buyers looking to close out before the end of Help to Buy and the freeing up of mortgage lending criteria for owner-occupiers. This should be good news for the second-hand market in new builds where savvy investors could look to pick up bargains."
He adds: “I think we will see in a steady increase in value of flats over the year as the return to the office speeds up, with houses stabilising to low single-digit increases, mainly driven by a shortage of supply, but none of it large enough to factor in the SDLT costs on a short term hold.”
Simon Barry, head of new developments at Harrods Estates, believes the concept of branded residences will grow in popularity next year. “Outside the UK, the concept of the Branded Residence is not new, but several new developments of outstanding quality which completed during 2021, have helped boost the appeal of London’s most exclusive and desirable super prime locations with a choice of properties at a whole new level."
"Among others, Mayfair Park Residences, 20 Grosvenor Square, One Grosvenor Square and The Peninsula, have all set new standards for interior design and architecture with amazing facilities, providing a seamless lifestyle experience with the attraction of five-star hotel-services."
He went on: “This is the future of luxury property, and the appeal to ultra-high net worth buyers is the way these properties allow their opulent lifestyles to be expressed through their homes. The delivery of such outstanding developments is sure to help drive demand and growth across the city in the months ahead, especially for buyers who are not permanent residents and who rely on full management and house-keeping services.”
He also believes Paddington, Bayswater and other parts of W2 will experience impressive growth next year. Over the next few years, striking changes are coming to W2 and the areas around Paddington and Bayswater. Barry says this excellent and possibly sometimes overlooked central location has recently attracted billions of pounds worth of investment, a trend which is set to continue.
“I am expecting to see a high level of buyer interest in Bayswater and W2, where there is more high-quality stock available and prices look increasingly attractive, given the perennial appeal of Hyde Park and Kensington Gardens on the doorstep," he explained.
“The north side of Hyde Park has traditionally been seen as less desirable than the south side. It missed out on the popularity of Notting Hill to the west during the 1990s, and the surge in demand for Marylebone to the east. However, this looks set to change with a long overdue revival of Queensway, a pipeline of exciting new residential schemes and the opening of Crossrail at Paddington in 2022."
He added: "The redevelopment of Whiteleys with The Whiteley Residences and Six Senses Hotel could also prove to be the catalyst which makes buyers believe in the future of W2 as the next potential ‘super prime’ location. Bayswater has everything to suit the post-pandemic buyer: space, quiet residential streets and squares; London’s largest park on the doorstep and a ‘village-feel’ – all combined with an incredibly central location.”