I've not written for a
while. I guess I've rather fallen out of the habit and, outside the tedious conspiracy theories surrounding Covid-19 and now 5G, there's been a lot of really good stuff written by others. So I've not
Leaving aside the conspiracists' paranoia, and despite the
general economic hiatus, there's a lot going on in the real estate sector. Not so much physically perhaps, but a lot around speculation, conjecture, analysis and projection. So, much cerebral effort.
Particularly in terms of values and length, depth and shape of the downturn and subsequent recovery. Are you a 'V' a 'U' or an 'L'? There's also been a fair bit of soul searching over what really
matters; about resetting the dial and taking advantage of the situation to make real estate a better place. Particularly a greener, fairer and more equitable housing market.
Simon Ricketts wrote an interesting piece regarding this which
I posted a couple of days ago. You can find it at Simon's blog here. In his piece, Simon deals with Keyworker housing. Or rather, the lack of it. Whilst we applaud our NHS
every Thursday at 8 pm with an outpouring of national love and gratitude, will our generosity evaporate when *this* is all over? Will we immediately forget the sacrifice that all key workers made to keep us safe, to nurse us, to keep the streets clean and our bins empty, our shelves full and our homes warm and
I'll come back to this.
Markets are not markets anymore: at time of writing oil is
currently worthless and Zoopla have declared there is no market. If we see an extra 2m unemployed and the reality of the OBR's GDP fall of 35%, it will not be a place we've been before. So, property
industry pundits have little in the way of comparison by which to measure our situation. The many yardsticks by which our recovery might be determined have been pretty much exclusively economic in
nature. That is to say, part of a broken economic cycle where the chain comes off when we've been pedalling a little too hard, too fast and with too much abandon.
Covid-19 is not like that. Here, we find ourselves hurtling
downhill with no brakes, flat tyres, sitting on a seat post, and with handlebars that have come adrift. We're moving, albeit not in the direction or speed of our choice and with no control over
anything else. So, to flog this analogy to death, to assume recovery is a matter of fixing the chain and pedalling away to a V for victory recovery is folly. What we need is a new and completely
But a new bike is not what we'll get. We'll get Boris's old
broken bike with some very shiny extras to make it look good and give an impression of functionality.
- Help to Buy will be extended, despite the fact that the
248,000 properties (£14.31bn loan value, £65.69bn asset value) bought via the scheme so far are likely to be in negative equity if market values fall as predicted by even the most optimistic
'experts'. The mortgage trap door opens ever wider.
- It's likely that Permitted Development Rights will be
extended. Probably the most pernicious of all planning deregulations to date. It offers nothing in the way of affordable housing provision and has been ruthlessly exploited by a number of developers
who leave behind the very worst modern housing available. Very probably unsaleable in the future.
- To 'kick-start' housebuilding in the aftermath, planning
restrictions will be relaxed. We have already seen calls for this from the industry. And with Sir Eddie Lister advising Boris, as he did at the GLA it is likely we will see an unfettered industry
deliver what they want to build rather than what we need building. So much for 'Build Better Build Beautiful'. In future years, we will look back and dismiss what we see as 'Post-Covid-19
- I'm afraid also that many current consents, whether under
construction or not, may be consigned to the planning bin. I would expect a large number of developers to cite 'viability' as they go back to committee and substantially reduce their affordable
housing obligations. It seems to me to be inevitable. in 2018-19 Just over 28,000 affordable homes were funded via S106 (England). Approximately 49% of all affordable homes. That figure could fall
Which brings me back to our key workers. As we come out of this
viral mess, and we will, what now for our frontline workers? What is their future now that they risked theirs for ours?
Following WW1, Lloyd George promised returning soldiers 'Homes
Fit for Heroes' and the 1924 Housing Act paved the way for slum clearance and new council houses. Today, we don't have those 'slums', other than those in PDR incubation, but we have a problem: lack
of good quality, affordable housing for all. And we will continue to have a problem until we recognise what really matters. Which is that society does not function at any level without our key
workers; those people whom we passed anonymously in the street only a few months ago whom we now laud as heroes.
This resetting of the dial, the coming up for air, the taking
of a deep breath and the delivery of a greener, more sustainable and fairer housing market is something we must grasp and keep tight hold of.
This does sound as though I am wholly negative, or at least
pessimistic, about life in the industry following Covid-19. I'm not. But I can see the signs of self-interest and we must guard against it. They're there for anyone to see if they've been in the
residential sector for any length of time. I wouldn't necessarily cast this as a Faustian struggle, but the residential sector has, in my view, long made that pact. The good Doctor knows how
difficult is it to renegotiate.
There are nevertheless, some incredible forces for good and
some amazing people. The Do Some
Good movement is an exemplar of how the real-estate sector can selflessly come together during Covid-19 and coordinate a valuable and substantial effort in the fight against
this virus. There are people who have worked tirelessly for years who can see the changes that have to be made: Mark Farmer, the MMC champion knows we can build better, more sustainable buildings
that not only benefit the end-user but also modernise the industry and secure its future. SME developers like Citu, Etopia and Inner Space Homes who are trailblazing the eco-building industry and who are simply focussed on making
life better. There are organisations like the Urban Land
Institute, at the forefront of progressive thinking. Regeneration experts such as U+I plc creating exciting new sustainable places to live. Movements like Build to Rent, Co-Living,
Co-Housing and Intergenerational/Later-Living are packed full of deeply thoughtful individuals whose goal is to set aside old ways of thinking and reimagine housing as a place to call home. Proper
community. Not just an address. Then there's a kaleidoscope of proptech, where the earnestness of its developers to improve every aspect of life is palpable, energetic and enthusiastic. And we have a
whole host of architects, engineers, property managers, investors and institutions who have seen the ESG light. And let's be straight here, if Larry Fink has seen it, we're talking a fair number of
So the real-estate sector is not lacking its champions nor its
desire for change, nor an understanding that change must come, nor indeed the individuals with the strength, integrity and charisma to deliver it. I feel that we are in a place where the systemic
damage is too great. Too deep. I do not see a V-shaped recovery, but rather a long U. This gives us time to come up for air. To take stock and remember the heroes and what they deserve. Not just at
8pm on a Thursday, but forever. And it is within our grasp.
Thank you for reading
#Housing #Residential #Covid19 #Change #Community #Keyworkers