Traditionally I do a review of the property market every January but I’ve been reticent to do so this year. Somehow it feels a little dispassionate to be talking business and successes while so much heartache is happening around the country. I guess the flip side of that is we do need some good news stories to keep an air of optimism about what the future holds. And the property market is certainly providing one such positive ray of light through all of this.
Our industry was closed through the first lockdown. However, during these next two lockdowns, we’ve been permitted to continue working. I’ve stressed to my team what a privilege it is to be allowed and able to conduct our business to a degree of normality, especially while that opportunity has not been afforded to many. I must say they have respected that privilege appropriately throughout. We have scaled down staff in branches to only sales staff, who need to be able to facilitate viewings and valuations.
We’ve made the branch environments as safe as possible, run strict protocols and placed major onus on personal responsibility of each employee to adhere strictly to those rules. It feels strange to work behind locked doors but it’s understood how important that is. Nobody has been forced to be based in a branch and anyone whose personal circumstances dictated working in branch was not advisable has remained working from home. Our admin, Property Management and accounts teams have remained pretty much home working for nearly a year now.
Communication and making sure our people understood the challenges and financial implications through the last 12 months has been key. It’s meant we are probably in an even better place from the perspective of employee relations than we were a year ago.
How did we cope compared to others? As market leaders you are always there to be shot at, so it was pleasing that every single one of our sales and letting departments grew its market share, albeit most just marginally, despite being ‘top dogs’ already.
On to the market itself. It’s defied our best hopes in truth. Lockdown 1 shut off our business in full for that period, but since then the bounce back has been amazing. The enthusiasm of the public to keep looking at property, be it because their circumstances had changed, they had made new life choices or it was simply something to do in lockdown, meant that enquiry levels shot up from the end of May onwards. And have held all year. The government Stamp Duty Incentive certainly helped maintain that enthusiasm.
We were instructed on 17% more properties to sell in 2020 compared to 2019, and agreed 27% more sales in the same period. Whilst being shut for nearly 2 months! Property prices in Watford and Hemel Hempstead rose by 4% while Bushey dropped a little at 3%. Our New Homes business experienced a similar trend, up 10% on new agreed sales as developers managed in the main to keep builds on track with construction allowed to continue.
The only negative really was that transaction times increased as many bodies; lenders, councils, management companies and solicitors had to adapt to home working parameters and a lot of them struggled to adjust (or were simply poorly managed).That’s meant a significant backlog of sales to still go through and a concern many who planned moves around a Stamp Duty break will not qualify for it if the process doesn’t speed up.
There was also the challenge of new fire regulations slapped on thousands of apartment blocks that rendered huge numbers of flats unsaleable until upgrade works had been carried out.
We saw a small drop in agreed lets, down 5.5% year on year. This was reflected across the industry and was more to do with the boom in sales attracting some potential tenants to buy rather than let, as opposed to any underperformance. The impact of increased taxation on and costs to landlords also made more of them give up and sell up.
Our average monthly let increased in Bushey (7%) and Watford (4%) and Hemel dropped (3%). Probably a better guide is that over the last 3 years the average monthly rental in each area has risen only very slightly.
Prospects for 2021
If we were looking at this from a Threats & Opportunities standpoint, I would say as follows;
The opportunity is that with the vaccination comes a level of normality returning to the economy and transactional living. A feel-good factor to take hold and an energy about having come through a very dark 18 months in history.
The threats are the impending end to the Stamp Duty discount that could take the wind out of the sales market. And the fear about future taxation to pay for the Government having had to prop up the economy so significantly for a year – especially the furlough scheme.
My nature is to be glass half full, so I anticipate the former outweighing the latter, but, if nothing else, 2020 taught us in business that you have to be ready to adapt and act quickly. Whatever this year brings, Imagine will, as always, be ready to face those challenges. In the meantime, I’d like to thank my staff and all our customers in 2020 for your loyalty, support and good faith, while wishing you a very happy and healthy 2021.