What’s in store for 2020?

Back to Real Estate Committee publications

The end of January has passed and Brexit has finally been ‘done’! Can we all breathe a sigh of relief? Undoubtedly, activity has increased as confidence returns to the property market in a way we haven’t seen for some time. 

Everyone is making the most of it so we can expect this year to be busy, assuming, that is, that a trade deal is concluded with the European Union by the end of December this year when the transition period ends. If we haven’t sorted out an agreement by the autumn, we might see the return of caution as uncertainty about the effect of leaving with no deal looms large. 

Let’s hope this doesn’t happen and let’s take comfort in the fact that we are promised by the government that there will be an ‘infrastructure revolution’ to service new development. If this is to be the case, we need to see HS2^[1] and Northern Powerhouse Rail being delivered, particularly if we are to get anywhere near the target of one million homes in the next five years which is the challenging objective the government has set itself to meet the housing crisis.

We have certainly seen a catalyst in the emergence of local authority-backed investment, for example, by the likes of Trafford and the Greater Manchester Combined Authority, which have employed low cost borrowing from central government added to their own funds to provide debt funding to support regeneration. We need this welcome trend to continue. This isn’t going to be enough, however, and greater support from central government funding will be key to the delivery of this ‘revolution’.

Another product of the pressure to deliver housing quickly is the fuelling of progress in modular technology where the reduction in construction time can be as much as 70 per cent, meaning a quicker return on investment, not to mention the environmental benefits of a cleaner and quieter construction site as manufacture is undertaken off site.

This increased activity and the promise to build more homes and infrastructure will also offer scope for further disruption in the construction industry. Proptech companies will continue efforts to work with those stakeholders that wish to embrace technology to design, plan and project manage schemes, seeing the benefits that better efficiency from the use of artificial intelligence can bring in terms of savings in time and cost.

In terms of sectors, not surprisingly, science and technology will continue to be hot in 2020. We are seeing this continuing trend particularly in Manchester, one of Europe’s top digital cities, where demand for space by such businesses is pushing out the boundaries of the city beyond the traditional core into areas such as Bruntwood’s Circle Square, creating exciting new districts.

Associated with these technology driven businesses is the ‘property as a service’ model, which will continue to grow in popularity, where occupiers communicate with property owners about the services they want via property management platforms. The landlord delivers and the tenant pays for a bespoke service putting the customer experience at the heart of the property relationship.

So there is much cause for optimism and the distinct possibility that there will be even more activity than we think as those with cash to spend do just that as the detail on Brexit gets resolved. Things are on the up!

[1]      HS2 - proposed high speed railway, linking Birmingham, Leeds, London and Manchester.