Property growth rates in the capital could slow in the medium-term, as pandemic-led lifestyle changes like wanting a garden or office space are likely to continue.
House prices in the UK have on average grown by £22,000 in the last 12 months, according to the latest figures from Halifax, however prices in London have lagged behind, as lockdowns made larger properties with outdoor space more desirable.
Onthemarket CEO Jason Tebb reckons some of the lifestyle changes will throughout the pandemic will continue, however London properties are unlikely to fall in response, but rather growth could slow.
“There’s no doubt the way people work and the time that people spend in the office has changed significantly, [but] I can’t see it being a complete exodus out,” he told City A.M.
“I disagree with that view because I still believe many people move for many reasons other than financial. There will always be people who want to live in the centre of town, and there will always be people who was to live in the outskirts.
“I think the trends that we’ve seen in the last few months; where people are looking for larger gardens, people are looking for double office space for both partners, will probably continue, but there will always be an influx of people coming into London for jobs and opportunities, and I think that will continue in the medium term.”
As a result of pandemic-led changes, he said growth rates on London property could decline, but prices would not, because “there are enough people in that area looking for property and there are comparatively few homes to buy, so… [the market] will still be propped up by those fundamentals.”
Group to repay Covid grants
Onthemarket today celebrated its first full year of profitability, after benefitting from the UK’s booming housing market driven largely by the stamp duty holiday.
In the year ending 31 January, the property platform posted revenue of £23m, up 22 per cent on 2020, and an adjusted operating profit of £2.4m, up significantly from a £9.2m loss in the previous year.
As a result, the group will repay to HMRC the grants of £449,000 it received under the coronavirus job retention scheme, in light of its stellar performance.
Following publication of its results, Onthemarket’s share price increased 0.67 per cent in the first hour of trading.
The property platform saw massive activity on its site in the last year, both before the stamp duty holiday was introduced, and after.
In the UK’s first national lockdown, when the housing market was effectively suspended, visits to the site were up 13 per cent.
Once property market restrictions were lifted, visits to the site jumped 31 per cent.
The group has previously said its home valuation tool led to a boom in activity, after the chancellor’s introduction of a stamp duty holiday during the pandemic boosted house sales.
CEO Jason Tebb said: “Despite the unprecedented conditions we have faced, we have continued to grow the business and achieve profitability.
“Our operational and financial programme is a testament to the efforts of the team and, since joining Onthemarket in December, I have been incredibly impressed by them and the underlying strength of the business.”
He added: “We look to the future with great excitement. The UK property market continues to be very active and our significant market opportunity remains. We our strong foundations and a new vision and strategy, we are well positions to succeed.”