Can the housing market adapt for the post-pandemic homebuyer?
Despite the challenging and distressing times in which we now live, the housing market appears to be shrugging off the uncertainty and moving ahead at pace. But homebuyers have new aspirations - can the housing market meet them?
Nationwide have reported annual house price growth at its highest level since January 2015, while mortgage approvals for house purchases rose again in September to the highest level since 2007. Performance is not consistent across the market, however.
Pent-up demand and the temporary increase in the Stamp Duty threshold have of course spurred activity. However, the patterns of demand also suggest shifts in preferences in the shadow of the new world in which we live. A recent survey by Nationwide (September) found 10% of those surveyed were in the process of moving as a result of the pandemic and a further 18% were considering a move for the same reason.
We can of course jump to conclusions on what has driven these decisions to move, but it is important to understand the underlying drivers if we are to be able to effectively plan for the future. To this end, Bidwells undertook a survey of households in the Cambridge area during the summer months to better understand how residents view their homes, how they perceive their homes performed during the lockdown period and aspects they would change with the benefit of hindsight.
Following the shock of the build-up to lockdown in March many households settled, to varying degrees, into a routine of online meetings, home schooling and sixty minute walks. During this period, homes doubled up as workplaces and classrooms and, for those shielding, become the extent of their world. The home took on a magnified role in our lives and our survey finds some lived up to expectations better than others.
In general, the factors that spurred people to choose their homes were not the characteristics that were now valued. Proximity to work and access to transport were key drivers of choosing a property, but with the lockdown experience under their belt, the survey found households placed private outdoor space and high-speed broadband at the top of their list of most valued characteristics.
The desire for private gardens, space to work and high-speed broadband are articulated firmly in the results. 42% of respondents noted the key factor they would change about their home is access to private outdoor space with a noted preference for gardens.
Similar studies over recent months have also noted the desire to move further afield given increased flexibility to work at home. This will inevitably be seen in and around the Cambridge area, although potentially will have a lesser effect due to the unique nature of the local economy; science, medicine and engineering is generally trickier to undertake at home, whether you have a benefit of an office or not.
As we enter week three of Lockdown 2.0 we might again be considering the performance of our homes. We can, of course, also look ahead to the remarkable likelihood of a vaccine roll-out over the coming months, thanks in no short measure to the herculean efforts of those across the Oxford-Cambridge Arc. With this, we can perhaps start to hope that life will move on from the COVID-19 era and memories of lockdown will hopefully soften.
However, few believe that life will, or should, make a wholesale return to the BC (before COVID) status quo. The housing market therefore faces the challenge of meeting and adapting to the evolved aspirations of buyers and renters in the aftermath of 2020