2020 will be a year that most of us will want to forget. As one of Worcestershire’s leading insurance brokers we felt the full force of the COVID disruption. And not just to our own business but to that of our property, tradesmen and fleet insurance clients. While our New Year’s Eve celebrations were quiet this year, we did rejoice in 2020 being behind us.
But enough of 2020 gloom, what does 2021 hold for Worcestershire? Well, from talking to our clients, and considering things like the COVID vaccines that are coming out and the buoyant property market, I think 2021 has potential. A recent survey by NatWest showed that small business confidence has risen sharply since the announcement of the vaccine, and while no one is expecting an overnight recovery, things are looking up. So, in this latest blog from Coversure Kidderminster – Kidderminster’s leading independent insurance brokers – I’ll look at what’s to come for the local housing market and for business owners in 2021.
I hope you’ll find this of interest, and if you’d like to discuss how we can help you protect your property, business or yourself, then please get in touch. You can call the team on Kidderminster (01562) 227 532 or for a great value insurance quote click here.
While I don’t want to dwell on this, it caused enough misery in 2020 to last a lifetime, it is still with us. At the time of writing the R-rate in Worcestershire and the West Midlands is falling as are the number of deaths. While this doubtless due to the lockdown, with the government having announced its offering 5m people over-70 a vaccine it seems that we are finally turning the tide.
From a business perspective the pandemic will leave lasting changes. In 2020 we saw a surge in the number of firms who were working remotely and this looks set to become a feature of our working lives under the ‘new normal’. By October 2020 24% of people worked exclusively from home according to the Office for National Statistics. This coincides with announcements by companies including Amazon, Gartner, Nielsen and Capital One that they have introduced plans for long-term working from home. A huge number of small and medium sized enterprises (SMEs) have also switched to remote working and I wouldn’t be surprised if some of our business insurance customers do the same. Lower costs, increased employee satisfaction and loyalty are just some of the reasons why businesses are looking to go remote and with technology improving all the time it’s easy to see why.
In 2021 I predict a surge in the number of people who will work remotely and that will lead to more people coming to Worcestershire. With people finding themselves free of the bind of commuting they have sought peace and space away from cities in beautiful counties such as ours. Late last year we saw a surge in demand for home and landlord insurance and I expect that to continue in 2021.
The Worcestershire Property Market In 2021
Whether you’re a homeowner or a landlord in Worcestershire, 2020 was a good year in terms of your property’s value. Between October 2019 and October 2020 detached house prices rose by an astonishing 21% to an average of £453,000. Semi-detached properties rose by 4% and there was an overall rise of 14% Home.co.uk figures reveal – that’s twice the UK average. Rents also rose with the average rental property attracting 5% higher rents as demand soars.
In a recent article The Guardian highlighted that record demand for country houses in the UK has driven prices here to a four-year high, with wealthy buyers flocking to Worcester. With more and more people of all incomes looking to escape the city crush and with remote working a realistic option for many, I believe 2021 will be another good year for property owners. Yes; there are uncertainties in the UK economy and the ending of furlough and the stamp duty holiday will slow things. But with demand for homes still massively outstripping supply and with Worcester and the West Midlands having so much to offer in terms of countryside charm and city amenities, I am confident we’ll start 2022 with prices even higher.
Well over 50% of Worcestershire voted Leave back in 2016 and while there have been times over the past four and a half years that I’ve wondered whether they’d ever get their wish, we have now left. That we’ve left with a deal is good news, not least as it gives businesses certainty.
Pre-pandemic Worcestershire was doing well. Accountancy and business advisory firm BDO’s Worcestershire Growth Report revealed that the region’s top 50 fastest-growing firms with turnover of over £10 million, now employ more than 15,000 people between them and have expanded their workforces by more than 30% in the last three years. COVID obviously threw a spanner in the works in 2020, but the certainty that the Brexit deal gives us will hopefully help get things back on track.
Two major industries for the region that are likely to be affected more than most are manufacturing and transport. Advanced manufacturing – everything from car parts to textiles and carpet making – will be impacted by our leaving in as much as there will be added paperwork for importers and exporters. While this isn’t an insurmountable obstacle, there will be bumps along the road as firms get to grips with the changes.
When it comes to transport and logistics, a sector that’s important to us as a business given how many truck insurance customers we have. Again, I can see a bumpy road ahead in 2021. On the downside there will be delays at some ports and additional paperwork. On the upside now that EU citizens can see that we have a deal and that there is an easy route to working and living here, some of the lorry drivers may return. The UK has had a chronic shortage of lorry drivers for many years and in 2020 this figure reached an all-time high of over 76,000, according to the Road Haulage Association (RHA). A loss of 14,000 EU drivers has been a major cause of this rise.
With 43% of the UK’s exports going to Europe and with local industries like car manufacturing reliant on just in time imports, having good relations and easy movement of goods matters. While it will take a few months for businesses on both sides of the channel to find their feet, I’m sure we’ll find a way to make this work.
As I mentioned above, the Worcestershire economy was doing brilliantly pre-pandemic and the fundamentals that allowed that growth are still there. Yes, COVID and lockdown have been hard to deal with and sectors like retail, hospitality and events have been pushed to the limit. Post-COVID these sectors will return and while they may not be quite the same – retail, for example, will become even more online-centric (great news for our courier truck insurance clients) as ecommerce continues to break records. There will also be new areas of opportunity such as cyber security. The Malvern Hills Science Park in the south of our county is home to the National Cyber Skills Centre and that’s helped build a burgeoning online security sector.
The influx of new inhabitants – many of them young and digitally savvy – will also help the region’s economy. They will be a catalyst for innovation and change as has been seen in cities like Nottingham, Hull, and Bristol.
Then there’s our manufacturing sector. From carpets to cars ours is an area with a reputation for producing world-class products, and as we open more trade deals with non-EU nations so we can expect to see opportunities to sell these goods to nations like Japan and Singapore.
Recovery for SMEs will hopefully be swift. Small upturns in demand can make a much bigger difference to small businesses than large ones and with the government having pledged to support the economy (no matter what), I am confident that the recovery will be here soon.
What does 2021 hold for Worcestershire?
Plenty! And much of its good. Yes, there will be challenges but that’s the same in every year and with a broad based and skilled economy like ours we can have confidence in the future. It will be interesting to see what impact the new residents have on the county and how that will develop things.
I am optimistic about 2021, and I hope you will all have a great year.
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