With 2020 firmly behind us, Joe Pepper, CEO at tmgroup, comments on what might lie in store for the property market as 2021 begins to take shape in the face of economic uncertainty:
As the famous saying by the Greek philosopher Heraclitus goes “change is the only constant in life”, and that has never felt truer than in the extremes we’ve experienced in the last 10 months.
Whilst it is somewhat of a relief that we’ve dodged the looming threat of a no-deal Brexit, or yet another extension period, the fight against coronavirus continues to shape our daily lives. Even with the recent approval of the Oxford / AstraZeneca vaccine, and the rollout of the Pfizer/BioNTech vaccination programme, the UK is still facing an extended and unpredictable period of lockdowns.
Yet these are not the only factors that will influence the success of the property market this year…
Furlough and redundancy will reduce lenders’ willingness to lend and lock some buyers out
Beyond the ongoing saga of Stamp Duty, with its soap-opera style “will they or won’t they” end on 31st March 2021, there are, of course, several contradictory factors which will influence how confident the market is likely to be in 2021. For many people, the events of 2020 have only increased their own insecurity, whether that is in their natural optimism or in more material terms in how secure their employment is. Many have been on furlough or reduced pay, and many more have been made redundant and are now looking for work in a hugely competitive marketplace.
Even if they find work then their recent experience will have reduced their long-term confidence and may well also reduce the willingness of some lenders to lend. The recent crisis is only likely to have increased the pace at which a certain percentage are locked-out of the property purchasing market, especially when you consider that others have prospered in the same period.
More and more people will be rethinking where they live now remote working is here to stay
However, for those who have been able to work from home and are secure in their jobs, they will have seen their outgoings reduced in 2020, and incidentally saved more than usual. They may also have seen enough of their home that they have lived, worked and even home-schooled their children in to realise that they may want something else.
Fuelled by the conclusion that remote working is here to stay, these are the people most likely to move in 2021, as they are freed from the commitment to live in a major city, opening up the opportunity for a lifestyle change. Life changes will also drive activity in the property market over the coming months, as we are told to expect a baby boom in early 2021, as well as a flurry of break-ups and divorces.
Businesses will continue to adapt to challenging market conditions – including search delays
Outside of these wider economic factors, over which we as an industry have little or no control, there are trends and influences much closer to our businesses. In the short-term, transaction delays are very much part of the picture, as many parts of the market have struggled with capacity and effective working over the past few months. Conveyancers and Lenders are both typically working to extended time periods for handling correspondence, and many Local Authorities are operating search periods many times longer than normal.
However, forward-thinking businesses are doing their best to adapt to these challenging market conditions and offer solutions to help take the pressure off. For example, tmgroup has recently launched a market-leading Search Delay Insurance product – provided by CLS Property Insight – to mitigate against the impact of search delays in the short-term.
We’ll hear more and more about digitisation and API integration
We’re also seeing positive developments in the longer term too, including the advice around digital signatures from HM Land Registry, which many firms are still digesting and looking to understand how they can implement into their current workflows. The adoption of digital signature technology is easy and readily available from a host of proven providers. More important though is the way that the technologies we all use continue to improve their ability to talk to one another, and to provide conveyancers and others with joined-up data and other information.
It was during the first lockdown that tmgroup announced a new and industry-leading set of APIs, which allow conveyancers to easily integrate their case management systems with tmconvey and tmconnect, and shortly after that were able to provide a joined-up view of the property transaction through integration with mio, the leading Sales Progression platform for Estate Agents. This year, it will be possible for a conveyancer to have the same real-time view as an Estate Agent and, through the mio app, update a home-buyer on the progress of a transaction, and for that information to be accessed in the conveyancer’s own case management platform.
The trend for real-time sharing of relevant data between property professionals is only going to intensify in 2021. Regardless of the success of the coronavirus vaccination programme, remote working is very likely to remain predominant across 2021, which will only accentuate the importance of having information and data relating to the status of a property transaction easily accessible and available digitally. There remains huge potential for the conveyancing market to increase overall productivity, and that will be crucial whatever happens in the wider market this year.