It’s been a busy few weeks for us at Hodge, and we’ve seen a real uptick in both enquiries and deals now entering diligence, which is very encouraging. The residential sales market remains extremely buoyant, and developers appear to be gaining more and more confidence.
There’s been lots of talk recently about how the office might look as we start to return to ‘normal’, and the advice to work from home where possible lifts. Sir Howard Davies, NatWest Group Chairman, recently argued that the era of daily commuting is over for good and that central London footfall will never return to levels seen before Covid.
While some have voiced opinions that this may be “too alarmist”, the office and how it will be used in the future, will undoubtedly be different than pre-pandemic – and that will, no doubt, have a knock-on effect for residential developers and the development finance market.
A rise in people working from home or in a more hybrid environment is only likely to continue to change the residential demand dynamic, particularly in the regions, as an increasing population choose a location outside of the city to reside. I don’t see Covid as the demise of city-centre living (or city centre working for that matter), but buyer requirements are shifting and that can’t be ignored.
Buyer demand is high, but so are their demands. What would have sold easily pre-pandemic now doesn’t always fit the requirements of today’s purchaser. And, even though supply is dwindling and prices are increasing, residential developers will need to continually find ways to differentiate their properties.
Developers will have to consider the changing face of a demanding residential market, particularly if they’re looking at regional projects. Things like home office space, additional outside space and parking, garage conversion and future extension options will all be more important than ever before, as well as more traditional factors, like internal layout and specification.
