Leading UK home builder Redrow (LON:RDW) published its market predictions for the next year on Tuesday morning, projecting a “strong” 2021 and a steady housing demand despite the ongoing coronavirus pandemic.
Matthew Pratt, CEO of Redrow, commented: “We are very excited about 2021. We entered our new financial year in a position of strength and, buoyed by the anticipation of the COVID-19 vaccine roll-out, we remain optimistic about ongoing housing demand and consumer confidence”.
In November, Redrow polled 2,000 UK adults to measure their views on their own homes in the aftermath of the pandemic and their desires as they enter 2021. James Holmear, Redrow’s Group Sales Director, commented on the survey’s results and the buyer preferences trends that he expects to see emerge over the next year.
Working from home infrastructure
Broadband speed was the “most challenging aspect” of being at home during lockdown for 50% of respondents, crucially jeopardising the nationwide work from home scheme as employers increasingly look to expand remote working.
More than half (56%) agree that having a separate study (or at least an area “dedicated to homeworking”) will be an important factor in deciding on their next home.
“There has been resolute demand for homes with more space to live and work as customers reflect on their lockdown experiences,” Holmear explains. “With more people expected to work from home regularly, even after the worst of the pandemic is over, space to work from home has rocketed up the list of priorities for buyers.
“We are also now more reliant than ever on broadband and along with water, gas and electricity, strong internet connection is now seen as the fourth utility. For many this year, a robust connection has been the only way to maintain both their professional careers and social entertainment and poor access can be frustrating, impact quality of life and even lead to isolation and loneliness. Today, broadband connectivity is one of the first things potential buyers want to discuss with us when they come to visit one of our new developments”.
Space in the home
Almost half of respondents (44%) said that the amount of outside space is their “biggest priority” when moving to their next home, with a further third stating the importance of floor space.
Building on the greater demand for space and a generous garden, almost half (48%) see a ‘detached’ property as being their “forever home” moving into 2021.
“With more time spent at home, gardens are becoming increasingly important and are now the top priority for many buyers when searching for their next home.” Holmear states.
“While this trend is one that has largely been bought on by Covid-19 and lockdown scenarios, we can expect to see this last for the long-term as Britons became increasingly aware of how important access to fresh air is for health and wellbeing. In the colder months, we’re seeing high demand among residents for gardens that offer the potential to provide snug entertainment spaces that can be quickly equipped with fire bits and outdoor kitchens”.
With working from home becoming the new normal for many UK professionals during the pandemic, less than 10% are looking to live closer to their workplace in the future. Almost half of respondents (49%) actually stated that are happy to move further away. 2 in 5 (20%) Londoners would be happy to live an additional 45 minutes from their place of work under the assumption that office attendance will gradually diminish in the coming years.
Holmear adds, “This year, city-dwellers have seen the benefits of living away from traffic pollution and crowds, and are now in search of a healthier lifestyle – even if this means looking further afield where they can find attractive price differentials that will enable them to afford the extra room they crave. There is now less need to live near a place of work, encouraging a general movement away from cities, and a willingness to commute further and less frequently.
“Our research found that a quarter (23%) would be happy to spend an extra 30-minutes travelling to their place of work and we’re anticipating a big rise in the ’90 minute commute’ which in future is only done a few days a week”.
Redrow reported that technology in the home buying process will “become more prevalent” in the near future due to increasing demand for buyers. The pandemic has also accelerated the existing trend towards online ‘hybrid’ models of home viewing.
“Housebuilding has traditionally been stuck in the dark ages when it comes to technology, but buyer demand is pushing the industry further into the ‘digital’ space and we can expect to see further advancements over the next year. Last year Redrow launched its online reservation service, which is accessed via our online member’s area, My Redrow. It allows buyers the opportunity to legally complete the reservation of their new home online and means that COVID-19 aside, our customers no longer need to visit our sales centres for a long reservation meeting.
“We couldn’t have predicted that the ability to look around plots and reserve homes virtually would be as important as it is today, but our investment in technology has meant that we have been well placed to support our customers who have still wanted to progress with their move during lockdown”.
Established more than 45 years ago, Redrow has earned a reputation for building quality, beautiful homes and “creating a better way to live”. It is listed on the London Stock Exchange and is a constituent of the FTSE 250 index. For the year ending 28 June 2020, Redrow reported revenue of £1.3 billion.
In Q3 2020, Redrow achieved the Global Good Company of the Year Silver award in recognition of its social impact and launched its ‘Nature for People’ biodiversity programme, established as part of a long-standing partnership with charity The Wildlife Trusts.
Over the course of 2020, despite the pandemic Redrow has consistently been rated as “excellent” on Trustpilot and achieved the Five Star Customer Satisfaction award from the Home Builders’ Federation (HBF) for a consecutive year.
The company is also one of only eight UK construction companies to be named a Diversity Leader in the Financial Times’ inaugural list of European leaders for workplace diversity and inclusion.
According to Hargreaves Lansdown, Redrow has a market capitalisation of £1.83bn, a dividend yield of 5.96% and a P/E ratio of 15.35.