Assetz chief says residential housing will benefit from struggling retail sector
Assetz Capital’s chief executive Stuart Law said that residential property will be the main beneficiary from Covid-19’s impact on the retail sector.
New statistics from the Office for National Statistics on retail sales data showed an improvement in July. Last month retail sales volumes rose by 3.6 per cent from June and are three per cent above pre-pandemic levels in February.
Law (pictured) said retail rebound but it will only be temporary because housing will become peoples’ priority.
He said that many people will use the money they have saved during lockdown to move house.
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“Without commuting and spending money in coffee and sandwich shops near work, the majority of people have effectively had a massive pay increase and in the short-term that’s probably going into retail, with the main beneficiary being supermarkets, however, for certain the top item on everyone’s list will be housing,” said Law.
“People will use that extra money to move house, so you’ll see a boom in housing and a rise in prices as a result.
“The money is leaving the pockets of owners of city centres, sandwich shops and pubs, which have experienced bad situations and will lead to hundreds shutting down, to go into housing.”
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New HMRC data showed a pick-up in activity for both residential and commercial property transactions last month.
The provisional seasonally adjusted estimates of residential and commercial property transactions in July were both lower than July 2019, but higher than June 2020.
It was estimated that in July there were 70,710 residential property transactions, 27.4 per cent lower year-on-year and up by 14.5 per cent from June, and 8,380 commercial property transactions, down by 18.3 per cent from July 2019 and 27.6 per cent higher than June.
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“The residential market is booming,” said Law.
“That’s driven by the stamp duty cut, pent-up demand being unleashed and substantial demand for suburban and countryside housing. People want housing better suited to the pandemic.
“To a degree, commercial property transactions will be rebounding but not necessarily all of it. Pubs, hotels and offices are three areas that are definitely under pressure. But warehousing has seen ballistic activity because of internet shopping.”
Online property lender LendInvest has also seen an uptick in the property market.
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“We are seeing liquidity in the built residential sector more generally, as developments reach practical completion and are sold on the open market, helped by the stamp duty changes,” LendInvest said in a blog on its website.
“It is also possible to see early signs of repricing of non-residential property, creating opportunities for borrowers to acquire these and reposition to residential unlocking significant value in the process.”