Is the private rental sector undergoing constructive reform? | Accumulate Capital
The societal challenges brought by the onset of the pandemic have exposed some of the old-fashioned processes and practices that plague the property industry. Solutions for some of which began to enter the market in various forms throughout 2020. In this article we will evaluate the impact of these and make some observations as to changes that are currently altering the face of the private rental sector within the UK.
The private rental sector underwent a late onset digital revolution in the second quarter of 2020. The government-imposed lockdown and social restrictions had exposed long-existing inefficiencies within the property sector, mainly the time-consuming nature of sending and receiving multiple complex forms for granting permissions, applications, conveyancing transactions and even simple tasks such as viewing enquiries. The mass shift towards a digital workplace enabled the sector to introduce automated services and various technological advances that have vastly increased efficiency and productivity in the transaction pipeline. The seamless transition towards the use of virtual viewings, automated enquiry services and online forms is one of the many reasons as to why the property sector maintained, and continues to maintain, its resilience.
The construction aspect of the build to rent sector is also primed to continue on a path towards digital transformation. From the various enabling technologies to organise and support construction contractors to a national planning framework available online, the construction industry is undergoing a period of modernisation that will improve supply and productivity delays.
According to a report carried out by market analysts from Glenigan, a gradual, yet sustained, recovery was seen during the final months of 2020 and they anticipate this to continue as the UK recovers from the effects of the pandemic and Brexit. The report also forecasts that the value of underlying UK construction project starts will total £49.3 billion by 2022, just 3% below 2019 levels.
In a more extreme sense, the increasing production and popularity of self-sustaining developments could be a nod towards future living possibilities. The impacts of Covid-19 have caused dense, urban areas to lose their appeal as many flee the cities in favour of the suburbs and more natural scenery. In a similar respect, the hard-hitting economic challenges to many businesses and product supply chains has created demand for self-sufficiency. Smart homes built with renewable energy technology have entered the market in a niche capacity, though concerns for climate change and sustainability, amongst the appeal of self-sufficiency, may increase demand. In various states in America, property developers have begun to offer loyalty schemes for developments with their own shopping facilities in another bid to appeal to those seeking self-sufficiency.
In terms of future predictions and current observations, the cost of pollution and the benefits of sustainability are setting the standard for the build to rental sector in a global respect. In an effort to curb the effects of the pandemic and boost economic recovery, various countries and global bodies have committed new plans to dedicate as much as 30% of their recovery budget to sustainable and self-sufficient buildings. The newly inaugurated U.S. President, Joe Biden, pledged $2 trillion to clean energy infrastructural investment. In the UK, there are a few major infrastructure schemes set to begin development and drive capital such as the Thames Tideway, the HS2 project and the Stonehenge Tunnel all of which are scheduled to begin construction as soon as 2022.
Last week we reacted to the Halifax House Price Index 2021 – Read more here