The long-awaited end of Covid-19 restrictions and the reopening of offices and amenities means that buyers have been tempted back to the capital after the past two years. But how have our property demands changed as the pandemic begins to slow down and what are we looking for in a home today?
What’s changed in the London property market
With UK inflation at a 40-year high, the cost of living crisis worsening and energy bills continuing to rise, no-one would be surprised if the property market stalled. Yet the ‘race for space’ that started during the pandemic has remained, with many people embracing hybrid working and spending more time at home. Demand is still high for properties in London, especially for homes with gardens, and it’s not just for short-term letting agreements.
Renters are looking for long-term rentals to enable them to feel more settled, especially with the risk that rents will go up in the coming months. And with reforms to leasehold properties, that is now more attainable than ever for renters. The changes to the law mean that leaseholders can extend their lease without paying ground rent to the freeholder, making the dream of home ownership possible without the unnecessary and unfair expenses.
From 30th June 2022, all long residential leases will be restricted to ground rents of a peppercorn, essentially meaning that these leases can be extended with zero ground rent required, except in the case of business leases or shared ownership. It’s a change that will save leaseholders thousands of pounds every year and offers greater security for those living in a leasehold property.
Prices in London dropped earlier this year, by 1.8%, and according to the latest house price index by Rightmove, the average home costs in the region of £664,400 amounting to £55,000 more than pre-pandemic. Even with such high prices, signs of the market picking up are still strong, with the average time taken to sell dropping from 68 days to 57 days in February.
The demand for smart properties
Developers and investors are setting themselves apart from others in the industry with so-called ‘smart homes’, fitted with superfast broadband and home automation systems. These days, having a connected home is as important as central heating or running water. Smart properties that are fitted with the latest in automation technology make for a more convenient home and that’s something that more and more people are seeking in our increasingly busy lives.
Prioritising green energy
Around 22% of UK carbon emissions come from our homes, though new homes are around six times more energy efficient than older properties. Green housing isn’t just about the energy efficiency of the materials used or the construction techniques though. It’s also about how a property fits into the surrounding environment. Developers are being pushed to consider the local ecology when creating housing, allowing room for planting trees, allotments and green areas for birds, insects and wildlife. And it’s something that’s filtered down to buyers and renters, with more people looking for sustainable housing and properties with attached outdoor spaces.
Transforming offices to residential properties
Remote work and hybrid schemes have resulted in more companies reducing their office footprint, which has resulted in a lower demand for commercial property. But with the residential market hotting up, more developers and investors are taking note and converting offices into prime residential properties. In fact, the City of London Corporation, the governing body for the centre of London, has plans to create 1,500 apartments by 2030 by converting empty offices, transforming business districts such as Canary Wharf and Square Mile. While it won’t be an easy transition, it’s one that could make valuable use of now-unused space.
International students and corporate tenants return
One of the biggest impacts to rental properties in London is the return of international students and corporate tenants, as universities, colleges and offices get back to a normal schedule. The London rental market has seen unprecedented growth that’s outstripping supply and creating an extremely competitive market. Rents are reaching far higher than landlords could have expected, as tenants try to secure properties especially in prime areas such as Kensington and Chelsea.
Spacious properties with versatile layouts
Even before the pandemic, our lifestyles were shaping a new generation of architecture. The traditional idea of what a house should be was already changing, but that was spurred on by Covid. The box with rigidly defined rooms for each part of our day, from eating and sleeping to relaxing, has evolved and now we need more versatile spaces. We now need homes that can evolve as our demands change, from growing families to work and living in one space. Property buyers and renters are seeking open-plan interiors, with bright light-filled rooms that can be converted at a moment’s notice.
The London property market has bounced back after two years of relative quiet, but now that life is returning to normal, its residents are once again willing to commit to the capital. From spacious properties that offer flexibility to the option to settle down for longer and prioritising innovation and sustainability, these are just a few of the ways that the London housing market has shifted as a result of the pandemic.