Coronavirus has seemingly affected every aspect of our lives, both at home and at work, and life is unlikely to return to normality anytime soon. Not least have the effects of lockdown been felt than in the property market, which pretty much came to a standstill in March. Fortunately, we have seen a resurgence in recent weeks, helped by the stamp duty holiday and a relaxation of lockdown measures. But how have recent events changed our outlook on work and property, and what does the future hold for property prices in our towns and cities?
Many inhabitants of our cities and large towns are considering their future options as to where to live. Do they live in smaller homes close to their town or city centre, partly to reduce commute time, or do they live further out from what was traditionally their place of work but in larger homes? The explosion of effective remote working will no doubt make the latter more attractive.
Commuting will no longer be a major factor in the decision-making process. Gone is the attraction of smaller homes close to what was the main place of work or transport hubs. There is now the need for home work-spaces to cope with remote working and with this will come the demand for larger homes further out of the towns and cities in order to meet this need. As demand for commercial space in our towns and cities reduces there is likely to be a corresponding reduction in demand for residential property in those areas, pushing prices down.
Bucking the Wave Effect
Historically, house prices can be seen to ripple out like a wave from larger city centres to surrounding smaller towns and villages. The fall in demand for city centre property generally will have the effect of reducing prices. Also, any new construction could be delayed for some time, or even scrapped. Conversely, the increase in demand for retail space and residential property outside our cities will surely increase prices in the smaller towns and villages. An increase in remote working may also mean that demand for housing in suburbs near train stations etc may fall with shorter commuting times being less of an issue for buyers in the future.
If our working patterns move away from being centred in our cities then the initial drop in commercial and residential property prices will be felt countrywide. Bucking the traditional wave effect of prices emanating from the cities, our towns and villages could actually benefit from the fall in city prices and experience an increase in demand, and price, for property.
One thing is for sure, until a properly tried and tested vaccination is found to Coronavirus, if at all, our large towns and cities will be adversely affected economically and more so than other areas.
Could it also be that cities come full circle and become an attractive residential proposition and that cafes, bars, theatre etc in these places eventually recover. Perhaps our whole demographic will see a seismic shift with families moving out of the cities to seek more space and younger people who want entertainment on their doorstep moving in with property becoming more affordable for them.