Partners Katja Wigham, in our Commercial Property team, and Karen Jones, head of our Planning & Environmental Law team, examine the findings of our recent research, which invited close to 100 national and independent property developers to share their thoughts on the Thames Valley’s property market in 2021 and beyond.
When asked, 61% of developers described their confidence in the region’s property market as “high” or “very high”, 15% said it was “low” and the remainder were undecided. This certainly reflects a significantly reduced level of confidence in the normally buoyant Thames Valley market.
However, developers were more confident when it came to property values and the building of new homes in the year ahead. Only 16% believed that prices in the region will drop during 2021, with 54% expecting things to remain stable and nearly a third predicting that prices could rise by up to 5%. Looking ahead to 2022, 77% predicted that prices will increase, with a quarter expecting growth of more than 5%.
When looking at their own businesses, 80% felt that their existing development projects would not be affected by the ongoing situation. Developers also showed confidence in relation to future developments, when comparing activity in the coming year to pre pandemic levels. 40% were expecting to be more active in exercising existing option agreements, whilst 32% planned to maintain previous levels. 69% said that they would be more active in purchasing land and signing new option agreements. Only 14% were concerned that demand for completed homes may fall.
Increased costs, supplies of materials, availability of labour and a backlog in the planning system were among developer’s key practical concerns, with ongoing market uncertainty and any future lockdown also cited as potential challenges.
With the Government having recently confirmed that the UK “appears to be past the peak”, and the Bank of England forecasting that economic growth will "recover rapidly" in 2021, as well as the on-track vaccine rollout, there remain reasons for cautious optimism throughout the remainder of the year and certainly in to 2022.
Our award-winning Commercial Property team and nationally recognised Planning & Environmental Law team are experienced in advising landowners and developers on development land projects ranging in value from under £1 million - £100 million.
Clients benefit from our established relationships and experience in working with other professional advisers and from our detailed understanding of the region. Colleagues have also acted for and worked within local authorities, so we have a firm insight into how they operate and make decisions.
Listening carefully to our clients’ needs and aims, we are committed to providing clear, practical, commercially focused and effective legal advice, a responsive and highly personal service and, crucially, value for money.
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This article is intended for the use of clients and other interested parties. The information contained in it is believed to be correct at the date of publication, but it is necessarily of a brief and general nature and should not be relied upon as a substitute for specific professional advice.