Let’s get Brexit out of the way. The property market is no different from any other market in being a simple equation of supply and demand.
So, in the short term, what might the promise of Brexit do? Well, on the supply side, it is hard to see that a great deal will change. Every government promises a flood of new building that is thwarted by building regulations, environmental concerns and perhaps a touch of NIMBYism. Will builders lose confidence in building homes? There seems limited evidence to support this.
Demand is a bit tougher to call. The Bank of England has significantly reduced growth forecasts for the next two years and some financial analysts are putting the chance of a recession at a 50-50, which would clearly impact demand.
The Bank of England has already reduced base rates to a record 0.25 per cent with the prospect of a further drop not far away and mortgage rates are cheaper, so a gentle softening of demand is my pick.
What really matter are the big issues affecting the property market in the decades to come. First of all, let’s talk demographics. There is going to be a significant rise in over 65s in the next 10 years and a dramatic rise in the number of over 85s.
According to the Department of Work and Pensions, nearly one in five people currently in the UK will live to see their 100th birthday. So here’s some really easy extrapolations into property. If you own a bungalow now, pat yourself on the back. You own a rare asset with a guaranteed increase in demand. There will also be a surging demand for homes suitable for later life - think everything from smaller gardens, close proximity to towns to adapted bathrooms/kitchens. In this area, those people that plan ahead will reap the rewards.
So what other macro – trends will we see emerging? Well, unless you believe this government will solve the home shortage, there could be a lost generation in terms of home ownership. We’re likely to see more demand for homes with annexes for the wider family (either the children or the
roperties will need to adjust to our more ’fluid’ lifestyles. This means lots of focus on the kitchen as both feeding, socialising and entertaining hub of the home. Also, watch for the maximum use of our occasional days of summer with continental style indoor/outdoor flow.
So, onto a trickier prediction. What wins in the demand stakes – town or country? The last 10 years have seen a net flow to towns as farming has become automated, towns more attractive, public transport less available and journey times longer and longer. All set to continue? Wait a minute – is technology riding to the rescue? Fast, ubiquitous broadband will eventually allow effective home working from anywhere, so for many people, the end of the tedious commute beckons. Also, why wait for that bus when your driverless car will soon be a mouse click away? So, technology in manyways brought people into towns and could now be helping spark a return to the country.
And our final macro factor is energy. The world is moving away from huge power stations processing coal, oil, gas or uranium to multiple source energy, often generated locally. Isn’t it strange how solar panels and wind turbines no longer look odd in the context of domestic property? But energy is not
getting cheaper any time soon and could be due for a substantial spike upwards. So, limit what you use and generate it yourself. Remember that Energy Performance Certificate (EPC) that hides on the estate agent’s property description that you ignore? Well, it matters now. Homes with adverse EPC’s
just don’t sell like they used to. So, replace that old boiler, insulate those walls and roof spaces, check out double (or even better triple) glazing and see what power generation options you might have.
So, if Brexit is a bump in the road, the big hairpin bends are demographics, lifestyle changes,town/country tussle and energy. S*
Sheree Foy is the founder of Source Harrogate – The Property Finders, www.sourceharrogate.co.uk