Defying forecasts of a housing market slump in 2020, the latest data from Rightmove and Knight Frank show that UK house prices are holding remarkably firm since the lockdown. With asking prices for newly-listed houses up by 1.9% in June, the market data reinforces that sellers are not panicking and that the outlook for the UK residential sector remains strong, according to Tiger Craft, Partner and CFO at Hilltop Credit Partners. The specialist fund provides tailored financing solutions to residential property developers in the UK.
Britain already suffers from a well-documented, chronic shortage of housing, and the recent work-from-home experience due to COVID-19 may further push potential buyers to swap city flats for homes with more living spaces and gardens.
Talking about the changing housing market dynamics, Tiger Craft said: “Restrictions on UK property transactions were lifted on 13 May, following an eight-week period during which the housing market was effectively shut. Knight Frank’s in-house data suggests, though, that transaction volume is bouncing back faster than many in the market expected, echoing the strong pent-up demand seen earlier in the year, following the UK general election. For the week ended 6th June, the number of offers accepted on homes outside of London was 52% above the five-year average, while in London, the number of offers accepted was 34% above.
“Many employees are now saying they will spend fewer days in the office, which means that they may be willing to sacrifice a longer commute for a bigger property with some outdoor space. As a result, we expect the ‘London commuter belt’ to continue to widen. Another report suggests there will be an increased desire of purchasing homes with gardens or balconies in the future.
“At Hilltop, we continue to remain cautiously optimistic about the UK housing market and are committed to funding high-quality assets and SME developers. It is always a question of finding the right projects, backed by the right sponsors, in the right locations. We continue to look for projects where we see better lifestyle solutions for families. That means better building solutions, flexible space for working at home, smarter technology and space.”
Summing up, Paul Oberschneider, Founder and CEO of Hilltop Credit Partners, adds: “The housing market is showing incredible resilience in the face of the Covid-19 pandemic, reflecting the fundamental supply/demand imbalance for residential property here in the UK. As SME developers continue to address this imbalance, they should increasingly focus on ‘future-ready’ projects. We believe that buying a house is not just a financial transaction; it is a lifestyle changer with an immense aspirational value. People will always require homes and no lockdown or recession is going to change this reality.”
Despite the market uncertainties, Hilltop Credit Partners continues to back residential projects and has recently completed a £8.6m loan to a North-West London developer, bringing their total funding commitments to £25m so far this year.