Optimism vs Uncertainty and Delay for 2022

Posted by UK Property Forums on 23rd December 2021 -

The ‘dysfunctional’ planning system and general uncertainty were among the fears of our experts when we asked their thoughts on the outlook for 2022. 

Optimism was also evident, supported by positive amounts of demand, but there was a feeling Covid restrictions are standing in the way.

Demand in the new housing market, however, is reaching unprecedented levels, with some developers already meeting their sales targets for Q3, next year.

Here’s what our Valley Voices said:

Philip Waddy, managing director of multi-disciplinary architectural, planning and design consultancy WWA, said: “Uncertainty is the key issue. The latest Covid variant has thrown a spanner in the works. Just as we thought the world was getting back to normal, we see more restrictions, increased working from home (not the way to stimulate the economy in my view) and a lack of confidence in the economic rebound that had begun following the release of the previous restrictions.

“The longer this stasis goes on the more the economy will stagnate.

“Demand will not disappear in the economy, it simply backs up – like a huge rubber band. If and when we get back to full normal there will be a huge rebound. Then inflation kicks in big time.

“After a decade of low inflation and steady state conditions, inflationary pressures will hit the young and those with large mortgages will feel it the most.

“In my opinion Government needs to sort out the dysfunctional planning system. It’s a brake on economic growth whereas it should be a catalyst.

“Development happens today despite planning, not because of it. The Planning White Paper came out over a year ago and we look set to wait the best part of another year before Gove produces version two. The longer the uncertainty goes on the more it costs the economy.”

Karen jones, partner and head of the planning and environmental law team at Blandy & Blandy Solicitors, said: “Uncertainty is the enemy of growth. It would seem the planning system will continue to be in state of flux, the proposals for wholesale change have been sidelined and the system continues with all the ‘tinkering’, which in large part has failed to improve the system or address its deficiencies.

“The process of appealing decisions is painstakingly long. Unless the system processes planning matters efficiently there may be bottlenecks in the system that cause loss and delay with an inevitable knock-on effect to the property sector.

“The Planning Inspectorate have rising numbers of open appeals – over 13,000 at November 2021 – which may not be a good sign for a pipeline of planning decisions to get the property economy fuelled up to go.”

David Jones, managing director of Evans Jones, said: “In property and development, by far the most serious issue is (to quote Boris) our ‘outdated and ineffective planning system’.

“Eighteen months on from the Government white paper, Planning for the Future, we have seen no real appetite to implement much-needed reform.

“This, coupled with a poorly resourced and underfunded local authorities, all amounts to a perfect storm; a planning system which is broken and unfit for purpose, coupled with a slow and ineffective decision-making regime.

“So what do I see for the coming year? Greater uncertainty, slower decision-making and increased frustration for all. Happy Christmas.”

Hugh Blaza, consultant with both UK Property Forums and Sandstone Law, said: “2021 gave the commercial property community a glimpse of ‘normal’ life and to say that the market is bulging with latent demand would be the understatement of the year!

“The go-stop-go as we emerge from the pandemic is not reflected in deal flow; industrial, R&D and distribution deals are powering forward (where land can be found).

“And even the nervous retail market is picking up, with the voids in Oxford, at least, gradually being filled by interesting (ie non-chain) offerings.

“If Omicron is despatched early in the New Year and we don’t suffer yet another, more threatening, variant, all the signs are that the market will take off. Better buckle up!”

Mike Shearn, chief operating officer for Haslams Estate Agent, said: “The increase in property values in 2021 has largely been driven by a lack of supply versus the inherent demand in the market.

“Stock levels remain low but we believe that more vendors will be attracted to come to market in the new year and, consequently, this should help rebalance and normalise the market. Consequently, transaction levels should increase and house price inflation will settle between three and four per cent in 2022.

“From a new homes sales perspective, most large sites are sold well into 2022, with some already having hit their sales targets through to Q3, 2022. This is unheard of.

“The challenge for many developers is, therefore, not sales but rather cashflow, based on their ability to complete on time and budget, given the pressures on supply chain, materials and trades.

“The private rented sector remains very strong and yields have improved throughout 2021. We don’t have any reason to believe this won’t continue into 2022.

“Build-to-Rent (BTR) units are starting to come to the market in increasing volumes and achieving 10-20 per cent premiums over the Private Rented Sector (PRS).

“The BTR propositions appear to be well-received and BTR does not appear to have had any impact on PRS in our area and so we continue to believe that PRS and BTR complement each other and service different markets.”

DevComms director Charles Bushe said: “Although none of us quite know what next year will look like, I’m certainly looking forward with optimism to 2022.

“Despite being driven by necessity, there has unquestionably been a spirit of innovation in the planning and development sector over the past year, as we’ve all been forced to adapt.

“This spirit of innovation has undoubtedly created a more equitable planning system, by improving access to information through digital and other means, creating a more democratic planning process and enfranchising certain demographics who didn’t previously engage in the planning process.

“So what are we hoping for in 2022? In politics, we hope for stability. In planning, we hope for direction. But in communications, and particularly at DevComms, we can be certain of further innovation.”

Phil Brown, head of Savills Reading, said: “Whilst we continue to feel the effects of successive waves of Covid, and despite some market turbulence, I am optimistic about the coming year.

“I see great opportunities for renewal and innovation, particularly in relation to ESG (Environmental, Social and corporate Governance). Embracing this important agenda will see our region deliver new and exciting developments that, not only address housing need and support the economy, but also help tackle climate change.

“For now though, and after another extraordinary year, we are looking forward to turning our attention to family and friends over the festive period. We wish our friends and clients a happy and healthy Christmas.”

Laura Fitzgerald, director of mode Transport Planning, said: “Well, 2021 has been another challenging year as we’ve navigated through lockdown, opening up and the uncertainty of what is to come!

“Yet the development planning industry, for us, has been incredibly busy and we’ve seen a lot of schemes approved or submitted in the Thames Valley and beyond, as well as a lot of projects starting up that will keep everyone busy for the months to come.

“Regardless of what the pandemic does, there is a healthy desire to carry on and work in our adapted and flexible working that seems to suit the industry.

“I think we’re all looking forward to the rest that that festive period brings and on behalf of everyone at mode, we wish everyone a Merry Christmas!”

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