2020 will be a year of continued change for London. Although a Conservative majority government has instilled a certain level of certainty in people’s minds, there are still Brexit negotiations to continue, fluctuating global politics and an increasing wariness of climate change.
All these factors will impact the residential and commercial property markets this year. Here are a few thoughts on what we could expect.
Residential property is on the up
Following the Conservative win, and in the hope of some semblance of Brexit certainty, UK residential property prices are already on the rise. The market expectation is that this will continue in 2020; Savills is predicting a rise of 1% while Strutt and Parker’s prediction is more optimistic at 4%.
The rise was heralded as soon as the New Year fireworks had fizzled out; Chinese property magnate Cheung Cheng-kiu agreed to pay more than £200m for a mansion on Rutland Gate in Knightsbridge. This is the highest price paid for a property in the UK to date and can be viewed as a bell weather not only for the property market, but for overseas confidence in London as a whole. However, the increased taxes for overseas buyers that the Conservative manifesto has thrown into the ring could mean overseas enthusiasm is short lived.
People will become more footloose
It has been a trend for some time now for people to take slightly less notice of postcode when making property decisions. This is true in both the residential and commercial property spheres.
In the residential market, buyers have always sought out value alongside other factors such as connectivity and amenities. Although property prices have fallen in recent years and months, it is still harder to find value than it once was. We expect people to look into new and evolving areas for the ideal place to make their home.
In the commercial market, the traditional norms of where occupiers settle will continue to evaporate. Why should a law firm stick to Mayfair? Or a tech firm to Shoreditch? Businesses are increasingly making decisions based on the property, its credentials and its immediate surroundings rather than its address and we expect more firms to move into slightly more surprising areas as the year progresses.
Sustainability will continue to rise up the agenda
Sustainability, zero emissions, zero waste; all aspects of preserving the environment have been zooming up everyone’s agendas. In 2020, the pressure on the property industry and those it serves will increase.
Businesses will be increasingly pressured to assess the risk that climate change poses to their operations and the properties they occupy. At the same time, we are being encouraged to make our homes as climate neutral as possible, employing both technology and streamlined ways of living that reduce waste and consumption. The voices of those looking to reduce climate change will get louder, not quieter, during 2020.