July sees the Welsh Government adopt a tentative approach to the relaxation of the lockdown rules. A semblance of normality will return as non-essential shops open, followed in due course by bars and restaurants.
Whilst England has moved ahead a little quicker, there remains a general sense of ‘wait-and-see’ in Wales. However, the relaxation can only be seen as the beginning of a series of measures designed to bring back the economy. This is underpinned by optimism that we are now moving to a scenario where the economy can operate alongside the existence of the virus.
What does this mean for the housing market in Wales?
Things have turned a corner and the residential market is slowly waking up because people are able to buy and sell houses again.
As we come out of lockdown it is likely that our outlook on life will have changed. Some homeowners may want to move – living day in day out within the same four walls may have galvanised them to move. Others may have spent the time re-decorating and have fallen in love again with their home.
When it comes to the types of houses buyers seek, the “working from home” effect of lockdown cannot be underestimated. Employers are likely to adopt a flexible approach allowing for home working, which means that houses with space for a home office will become more attractive.
The design of housing is likely to change – there is already a move to ensure new build housing is energy efficient and the Welsh Government are leading the way through its support of such schemes.
Developers have used lockdown wisely – we have seen an increase in the number of option agreements and conditional transactions being considered. This is likely to continue.
What does this mean for commercial property in Wales?
In the commercial property world, the same cautious optimism can be seen. In the leisure sector the gradual opening of public facilities, bars and restaurants will bring a much need tonic to a sector that has been immobilised. The high street can expect an increase in footfall as people return to shopping and engaging much needed social interaction.
Warehousing and distribution space should also continue to be in demand. Home deliveries were a lifeline for so many during lockdown and will continue be a useful way for people to shop.
Many things may not return to the way they were before, though. Offices, for example, will be used differently and there will be significant re-design of layouts as result of measures to protect staff and limit the opportunity for the spread of the virus.
There are of course harsh realities to face. The administration of well-known high street chains such as Café Rouge may not be the last. In the short term, landlords, both institutional and smaller property developers, will bear the brunt. However, with careful planning and the appropriate level of engagement from the Government, financial institutions and business it is possible to return.
Playing a part in the recovery
Overall, the journey back has begun, although the summer months in Wales will be governed by the control and suppression of the virus.
Adaptability has to be cornerstone of property development in the months ahead and it is one thing that everyone in the property industry is good at.
As property professionals we have a role to play in the recovery – and by taking careful, sensible steps we are able to help clients achieve this objective.