Partner Katja Wigham, in leading Thames Valley law firm Blandy & Blandy’s commercial property team, and Karen Jones, head of its planning & environmental law team, explain the findings of the firm’s 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, supply of materials, availability of labour and a backlog in the planning system were among developers' 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 into 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 to £100m.
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