How has connectivity impacted development in the UK during the COVID-19 pandemic?
As quickly as there were reports of a slight recovery in the housing market at the start of 2020, after a period of stagnancy due to Brexit and political uncertainty, the Covid-19 pandemic hit in Spring 2020. The immediate impact for many of our residential development and social housing clients was brutal. A tidal wave of uncertainty struck the housing market as most, if not all, activity ground to a halt.
Imagine if this had happened 50, even 20, years ago; not only would construction workers have been locked down in their own homes for many months, but many others working in and around the housing sector would have been unable to work from home. Admittedly, there were initial difficulties in effecting handovers of completed units, carrying out viewings, surveys and mortgages and actually physically moving home - but quite quickly we did then see a digital fight back, much of which was made possible due to connectivity and simply being connected.
So what did connectivity and staying connected mean for the social housing sector in real terms? Housing associations and their employers’ agents were able to attend virtual site visits and meetings, with the agents being able to confirm build stage milestones using photographs and videos, enabling developments to progress.
Similarly handovers turned virtual, again with confirmation provided via photographic and video imagery, and handover documents were provided in digital format. This was all in the context of many housing associations’ recent drive towards better efficiency and agility by harnessing the power of technology and connectivity. Many had already been working on digital platforms to enhance customer experience and in some respects lockdown has fast-forwarded progress here.
"Some would say advances that may have previously taken 30 years have been executed in less than 3 months."
Our increasingly connected world also meant that viewings could progress. Rather than physical viewings, buyers were able to review 3D imagery online and even access virtual viewings. Handovers became socially distanced and contact-free, with the installation of key lockboxes and information being sent in electronic format.
Initially we experienced many buyers struggling to get mortgages simply because the usual valuation survey required by lenders could not physically take place. However, there was soon a shift to desktop surveys enabling valuers to make use of online resources in order to carry out the surveys from their own homes which, in turn, meant that mortgages were able to progress.
Likewise, lawyers were able to work seamlessly from home and to a certain extent carry on business as usual via the internet; we have been able to carry out meetings that would once have been done in person via platforms such as Zoom, and have even been able to have documentation signed electronically as the Land Registry soon relaxed its requirements here.
And what about commercial property developers?
Just like those operating in other property related sectors, commercial developers felt the full force of lockdown as soon as it hit in late March.
Some found that live developments suffered an immediate stall in demand due to the extent of uncertainty for prospective purchasers, particularly in the hospitality sectors. Others experienced the polar opposite, with sudden increased demand where purchasers’ businesses related to products in high demand as a result of the pandemic.
Regardless of the manner in which demand for sites turned, connectivity facilitated communication between all parties. As in the residential world, site meetings quickly turned to video meetings and there were regular conference calls to deliver deals on time in tight timescales. Agents quickly adapted their marketing techniques to socially distanced, virtual or even drone viewings in order to secure purchasers.
Those developers with sites still in the planning phases faced additional challenges – would the pandemic cause delays here, so as to jeopardise (for example) upcoming option expiry and long stop dates? Once again we looked to the world of connectivity for solutions. Again in general terms, conversations could be had over video meetings, facilitating that all important personality and ‘face to face’ element of negotiations.
To the relief of many developers, local planning authorities adapted and made use of technology to enable their committee meetings to continue in the public forum, hosting virtual committee meetings, even broadcasting to the public on YouTube.
As the uncertainties posed by further restrictions to working environments and social flexibility show no signs of abating, developers will inevitably be wondering what this will mean in terms of demand.
The impressive manner in which those working in and around property have adapted making effective use of all varieties of connectivity, whilst demonstrating huge resilience, must offer some positivity; deals can keep being negotiated and agreed ‘face to face’, planning applications can still be progressed and sites still built out, marketed and sold.
Whatever happens, it is clear that connectivity has played an influential role in holding the property development market together in the most challenging of economic climates.