Whisper it quietly – are things starting to look up?
It may not feel like it with the Covid-19 pandemic still an acute threat and the daily battles in Westminster rumbling on, but as children reluctantly prepare to return to school and families ‘come back’ from forced staycations, there is a sense – a very cautious sense – that the property market is starting to buzz again.
True, no one is anticipating the September bounceback the industry normally enjoys after the summer holidays. Bricks-and-mortar retail is still on its knees, the long-awaited return to the office remains a distant prospect for many and the housing market’s current mini-boom could well turn into a bust once the government’s jobs subsidy programme closes.
As a Property Week investigation reveals this week, councils across the country are also contending with some hefty valuation writedowns and falls in rental income from their out-of-constituency retail investments, driving some of them perilously close to the financial brink.
But after months of relentlessly grim news about job cuts, insolvencies and financial uncertainty, there are a few reasons to feel slightly more upbeat as we head into September.
First, there is a huge wall of money just waiting to come into the market. Israeli billionaire Igal Ahouvi plans to spend big on London residential rental property and is targeting properties between £30m and £60m with an ‘unlimited war chest’ at his disposal. Despite the recent uncertainty, the student property sector is also enjoying attention from investors who believe it is a resilient market.
Second, there are some exciting developments in the pipeline. Take Cheltenham, which is working up plans for a blockbuster campus called Cyber Central UK, and Ireland, where Hong Kong billionaire Ivan Ko has set his sights on building ‘Nextpolis’, an autonomous city for displaced Hong Kongers.
Third, even in the unlikeliest of sectors, retail, the green shoots of recovery are starting to appear, in Ireland, anyway. Fourth, companies that put their business plans on hold over the summer are returning to them once more.
Finally, and perhaps most encouragingly of all, the industry is far more optimistic about the future now than it was at the start of summer, according to our latest Property Week sentiment survey. The survey also shows that more than 25% of the industry have already started to return to the office, while another third expect to return before Christmas.
If there is one factor this industry feeds on, it is optimism – an almost blind faith that deals can be done and buildings can be built.
Such optimism might seem illogical and, at times, even deluded, but occasionally it has its place and as the strangest summer of our lifetime comes to an end, it has its place now.