In an unprecedented year for many of us there is a lot to look back on and feel that progress has been made. There are however areas where more needs to be done.
In 2020, Proptech has become more familiar within the everyday. There is now a significant number of proptech businesses in both the UK and the world and although 2020 has seen the funding towards these businesses reduce significantly there is still progress. There has been a real move to digital transformation and a shift in mentality for the residential sector towards innovation in data assembly and the transacting and design of buildings and cities.
Certain sectors have continued to raise the profile and move forward, despite being held back by a lack of understanding by both planning authorities and financiers. Later living, built-to-rent and co-living are growing as alternative residential sectors and attracting the funding towards them. Across many cities and some towns are multiple schemes really delivering on this growth, and shaping their future.
As a broader sector of housing, house prices rose by 0.9% in November (according to Nationwide) putting annual growth at 6.5%. Ultimately 2020 delivered above expectations driven by high levels of demand, potentially from those spending time in their homes this year and realising they need something a little larger or with access to more green space. High numbers of completions would be expected until the end of the stamp duty holiday next March. On the rental front, this increased by 1.4% over the year to October (according to the ONS) but decreased in London.
As an individual I am in no place to forecast house price movement for 2021. PwC have a scenario where they expect UK house prices to grow by around 1% but could contract by around 7% under a ‘further outbreak’ scenario. More information is contained: PwC UK Economic Update Housing Edition.pdf
Now putting aside the potential up or down of house prices, the longer lasting impact of Covid on our homes will change how we think about them. There will be a lot more focus on:
- High quality: In order to increase housing there is a need to entice housebuilders to build more houses. The industry is constrained by capacity and the skills available to deliver more homes. These factors affect the quality of housing developments. Quality outcomes however create value and benefit for all involved in the building process, as well as the wider community in which they reside in.
- Social impact: There is a much wider issue in society and housing needs to do its fair share and move towards building to net-zero carbon. Social impact likewise is a focus, with businesses needing to bring climate and ESG policy from the business periphery to life.
- Modular: There are many reasons why increasing the use of MMC will support the wider increase needed in the production of housing. Linking above it helps improve sustainability of housing for starters. There needs to be a target set by the Government to really drive this forward. Homes England is well placed to help support this. Moving towards 40% of homes incorporating MMC, like in Nordic countries, feels something to aim for.
The overarching point to the above is having the people and skills to deliver. This is the challenge. There is an overarching need for more skills in the housing sector. I wrote in 2020 about the Importance of Talent in the context of Proptech but it applies equally. Now more than ever is the need to really engage with your talent and source more – think more broader than the typical employee and typical skill. And above all, think about the integration of smart technology and the internet of things that will support residential – whether designing, constructuring, managing or simply living. Technology will make our lives easier.