Where are we now and where is this market going? Some thoughts from Trilogy’s land guru and industry leader, Andrew Simpson

According to Paul Dales, chief UK economist for Capital Economics, the ‘recession’ is already over but the recovery will be protracted.

He goes onto explain the wind down of the furlough scheme will impact the quick turnaround in the recovery of GDP. Mr Dales believes that eventually the BOE will expand QE by a further 250 Billion pounds.

Whilst talking to our many friends and clients as well as industry colleagues, there is no doubt the housing market has bounced back since the easing of lockdown. Although it is by far from plain sailing, applicant registrations are up dramatically, and record sales months are being achieved.

Many buyers are currently looking to move out of the big cities and towns to market towns and villages and the countryside beyond in search of more space and better value for money. Whilst good train links are still important, there is no doubt that less frequent journeys into the likes of London are giving families the opportunity to spend less money and time commuting and spend more time together.

Trilogy are no different in how we have responded to the pandemic. We now have a rota system so that no more than three people are physically in the office at one time. Many of us are quite enjoying this new ‘norm’ of working between home and the office, especially as we can now meet clients again on site or for a coffee, at the appropriate social distance of course.

So where do we see the market going from here?

I will answer this question in two parts, starting with new homes sales as this is usually the end result of the sale of a site or building that has been sold for development.

The UK government seem to grasp the importance of a stable and balanced housing market and have further demonstrated this with the reduction in SDLT until March 31^st 2021. Personally, I hope they continue with it, but that may well depend on the volume of transactions between now and the proposed end date. We appreciate that there will be ups and downs over the next 12 to 18 months. Nevertheless, we do not predict long term price drops, in fact turning once again to Capital Economics’ July report, they predict a 2% rise in prices in both 2021 and 2022 for London and the South East.

Secondly, land. This is usually viewed with a longer timeframe and is unlikely to be affected by short term cycles, even a pandemic, especially if being purchased on a subject to planning basis. We saw a very short period in April and May where it became almost impossible to get a sale through to exchange of contracts where planning was granted and the purchase was therefore unconditional. This has quickly changed and as long as the terms are commercially viable, good quality sites with a sensible scheme in locations where people want to live are selling. Whilst our planning system may be receiving an overhaul, this is unlikely to lead to a glut of consents in good locations. As they say, “land, they don’t grow it anymore”!

Please feel free to call Andrew Simpson to discuss your land sale and purchase requirements.