2020 has arguably been one of the most turbulent years on record for the property development sector. Nationwide lockdowns brought construction works to a halt, and widespread uncertainty led to proposed plans being put on hold indefinitely.
Thankfully, with the vaccination programme now in full swing, normality is starting to return to the industry. Here are a few predictions about what’s in store this year.
The Key Things Driving Property Development – 2021
One of the biggest challenges that businesses faced during the COVID-19 pandemic was maintaining effective communication, especially with all employees having to work from home. As such, it’s likely that connectivity will be increasingly important for many companies, and that property developers will strive to meet this requirement.
Business owner’s priorities have shifted, and will focus on the following:
- A speedier internet connection (enabling more flexible, productive working)
- A well-connected location, with good transport links in the vicinity
- A location with plenty of amenities close-by, offering employees a good lifestyle while at work
2020 saw a notable rise in online shopping too, with several companies shifting to eCommerce, rather than bricks-and-mortar selling. This will probably continue, so some businesses will be looking for premises that offer good road connections with the rest of the country – in order to offer faster delivery times for their customers.
Challenging traditional commercial development
It’s no secret that the high street has suffered during lockdown. We predict that property developers will be focusing on revolutionising retail spaces (such as shopping centres) in a bid to lure shoppers back to the high street.
Mixed-use development will play a big role in this, and the social aspect of retail may also be maximised, as sociability is something many people missed while in lockdown. For example, retail spaces might be redesigned to reflect the rise in experiential shopping, which seeks to offer shoppers a good experience, rather than simply showcasing a range of products.
The traditional office layout could also be challenged. Businesses are likely to require spaces that promote mental wellbeing, with better facilities for staff, and more open-plan collaborative workspace. We anticipate that developers will experiment with new office designs, to promote more positivity in the workplace.
The continued growth of ‘Build to Rent’
Build to Rent has already experienced significant growth in recent years. Previously, much of the development was carried out in urban environments, and provided higher-paying tenants with luxury facilities such as roof terraces, gyms, and a concierge service.
We suspect this year there will be a focus on suburban areas instead. When it comes to rentable family homes in the UK, demand usually exceeds supply, so it’s a potentially lucrative market. Families are regarded as reliable renters, and are more likely to be long-term tenants too – something that’s highly desirable to investors in these uncertain times.
More sustainable building – and greater focus on the environment
In November 2020, the government published its Ten Point Plan, which related to their net zero carbon agenda. The Future Homes Standard now means that developers must reduce emissions in new build properties by 75 to 80% (by 2025), which means gas boilers will no longer be able to be installed.
The Ten Point Plan also requires developers to consider other factors too, such as proximity to cycle and walking paths, and low-carbon heating systems for the properties. Some savvy developers are already viewing this as an opportunity, and are promoting their sustainable credentials as a USP. This attracts more homebuyers, and can even elevate property prices.
Additionally, the Environment Bill is set to make net gain biodiversity a legal requirement. This means that an existing onsite habitat must be increased in biodiversity value by 10%. Again, this should be regarded as an opportunity to form partnerships with landowners, and create arrangements that benefit all involved.
Flexible working spaces
The pandemic has challenged businesses in most sectors, with many having to adapt their working practices. While it’s been a difficult year, it’s also provided companies with the change to experiment with alternative working models. Flexible homeworking has proved to be successful (broadly speaking), and the traditional ‘9 to 5’ set-up is now regarded as somewhat outdated.
Businesses may start to search for more flexible working environments; for example, serviced offices that have hot desks, rentable meeting rooms, break-out areas and communal facilities.
Taking a longer-term view
Property developers are increasingly prioritising legacy and permanency over rapid-fire new-build construction. Not only is sustainability a top priority now; so too is improved architectural design, with a view to building homes that owners can be proud of.
Social principles are now high on the agenda, along with the environment. Developers are creating residential zones with amenities for homeowners, communal areas, pleasant green spaces, and attractively designed properties.
Obviously, this has an affect on build-times and financial returns. However, many developers are taking the long-term view; building their reputation as well as their profits.
We expect to see a more joined-up approach in the future too – with developers working more closely alongside landowners, local councils, local service providers and more. This is a positive development, as it means communities will be working together to create residential and commercial areas, based on a shared vision. It should hopefully reduce any conflict and tension too, and enable new developments to merge more seamlessly with existing urban / suburban environments.
Improving quality of life
Lockdown was hard for many, with homeowners across the country complaining about lack of outdoor space in their homes. Another common complaint was having nowhere to work, or simply that the home suddenly felt unfit for purpose, with the entire family being inside all day, every day.
It’s likely that developers will take this into consideration; building homes that offer a place to work, plus a garden or good-sized balcony. Internet connection has also become a top priority for many; thanks to having to work or learn from home. As always, the focus will be on on delivering what the homebuyer wants.
If you’re thinking of building and selling a property development in London and would like more information on the points raised above, get in touch with our Board Director Damien Field: