Katja Wigham, partner in Blandy & Blandy’s commercial property team, and Karen Jones, partner and head of its planning & environmental law team, explain the findings of the firm’s recent research, which involved almost 100 national and independent property developers sharing their thoughts on the Thames Valley’s property market in 2021 and beyond.
When asked, 61 per cent of developers described their confidence in the region’s property market as ‘high’ or ‘very high’, 15 per cent said it was ‘low’ with the remainder undecided.
This certainly reflects a significantly reduced level of confidence in the normally buoyant Thames Valley market.
However, developers were more confident when it came to property values and the building of new homes in the year ahead.
Only 16 per cent believed prices in the region will drop during 2021, with 54 per cent expecting things to remain stable and nearly a third predicting prices could rise by up to five per cent.
Looking ahead to 2022, 77 per cent predicted that prices will increase with a quarter expecting growth of more than five per cent.
When looking at their own businesses, 80 per cent felt their existing development projects would not be affected by the ongoing situation.
Developers also showed confidence in relation to future schemes when comparing activity in the coming year to pre-pandemic levels.
Forty per cent were expecting to be more active in exercising existing option agreements, whilst 32 per cent planned to maintain previous levels. Sixty-nine per cent said they would be more active in purchasing land and signing new option agreements. Only 14 per cent were concerned that demand for completed homes may fall.
Increased costs, supplies of materials, availability of labour and a backlog in the planning system were among developers’ key practical concerns, with ongoing market uncertainty and any future lockdown also cited as potential challenges.
With the Government having recently confirmed that the UK ‘appears to be past the peak’ and the Bank of England forecasting that economic growth will ‘recover rapidly’ in 2021, as well as the on-track vaccine rollout, there remain reasons for cautious optimism throughout the remainder of the year and certainly into 2022.
Image: Karen Jones (left) and Katja Wigham.
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