Legal director of Galliard Homes, David Hirschfield, explains how graduates coming into the workforce must be surrounded by experienced colleagues to learn, develop and harness their own skills; ‘unfortunately Microsoft Teams and Zoom cannot replace osmosis’!
In your opinion, have people become so accustomed to working from home that we will see a depletion in the demand for commercial offices?
The view that the commercial office sector is now decimated is short sighted, but what we will see is a paradigm shift demonstrated by the location and sizes of offices being let and the length of leases being taken. Covid-19 has shown that presenteeism is outdated and does not correlate to an upward trend in productivity.
Certainly in the short term, employees are able to work efficiently at home, however as businesses move forward the need for physical contact must not be underestimated. The office is a place where ideas are fostered from genesis to execution and in parallel the workforce team learns together and builds up a collegiate rapport that drives business forward. The ‘working from home’ phenomena in a post-Covid era will shine a microscope over the inequality that subsists in our society. In the main, it will always be those that are more senior in their roles, have enough space in their houses or apartments and are set up with all the various mod cons that will champion the desire to work full time from home. However we have to recognise that those graduates or apprentices coming into the workforce must be surrounded by more experienced colleagues to learn, develop and harness their own skills. Unfortunately Microsoft Teams and Zoom cannot replace osmosis!
Taking the above into account, we will start to see many companies allowing flexible office and remote working which in turn will reduce the size of many HQ’s. The post-Covid era could well see a rise in corporates shifting away from large offices in the city centre to satellite offices in local towns and suburbs. In addition, we may well see growth in the co-working sector as businesses look forward and view short term lettings coupled with the experiential offerings associated with the co-working sector as the most efficient way to manage cash flow and entice their staff back to the office. The office market will not deplete but its outlook will most certainly change.
What would help get Britain building again to circumvent the housing shortage?
Quite simply – planning legislative reform and tax incentives! An estimated 8.4 million people in England are living in an unaffordable, insecure or unsuitable home, according to the National Housing Federation. We have a national housing target to build over 300,000 homes per year and we are failing. Annual net supply of housing will need to increase by around another 24% by the mid-2020s to meet the government’s target and every year as we fall short, the housing target gap gets wider. Housebuilders are geared up and ready to build, however in order for builders to build, the planning system needs reforming. Often it takes years for schemes to pass through the planning process with extortionate associated costs. We need a clear blue print on planning guidelines so developers and planners can agree on what it will take to achieve a planning consent without developers often jumping through all of the requisite planning hoops and policy frameworks, to then be potentially refused on grounds of subjectivity. Our country is desperate for good quality and affordable homes to be built. Planners and developers need to work collegiately together to achieve this within as quick a time frame as possible.
With regards to tax reforms, housebuilders have welcomed the stamp duty holiday which has allowed anyone who completes on a property after 8 July 2020 and prior to 31 March 2021 to save up to £15,000. This is a great initiative which has ignited residential demand for completed or near completed homes, however more needs to be done as this won’t boost the construction industry and housing numbers in the long term. The stamp duty holiday should also apply to those willing to exchange contracts (not only complete) on properties during this period, which will lead to thousands of off-plan sales.
Furthermore, the SDLT surcharge of an additional 2% for all foreign buyers of UK property (which comes into play in April 2021) must be looked at. When we approach such uncertain times, we need to do everything in our power to not just maintain but to promote inward foreign investment. There is already legislation in place charging a 3% surcharge on buying a second home, which by definition will apply to nearly all foreign investors, and now the notion of creating an additional surcharge onto foreigners buying properties in the UK will not just lead to foreign investors moving away from the UK property market, but it will have a hugely negative impact on the property market as whole. If homes are to be built in the UK, then all developers are reliant on bank financing. In order to secure the requisite development financing, pre-sales are needed and at present 75% of pre-sales are coming from abroad. In simple terms, without pre-sales, funding will fall away and without funding, no new homes will be built. With no new homes being built, the inevitable elasticity metrics of supply and demand will come to the fore. Supply will decrease as demand increases, leading to higher property prices and higher rental prices. If we as a country support home ownership and an increase in our housing supply, then this policy may well serve to have the exact opposite effect.
What do you love most about the real estate sector?
The product and the people.
What most people love about the real estate sector is that what you are doing is tangible. From conception to realisation, something physical will be built and will remain there for years to come. An immense sense of pride resonates from seeing something you have been a part of actually come alive and become a place of home to individuals.
The real estate industry has always been a ‘peoples person’ industry full of characters with entrepreneurial flair. This remains true to today. Property deals manifest themselves in the main through relationships, and if you act with integrity and perform, those relationships will grow deeper and deeper which in turn will increase deal flow and grow your business. The real estate sector is a small close-knit community. Reputation and relationships are everything.
Why did you choose a legal career?
Both my parents are lawyers so I was definitely influenced! Graduating from University with a history degree, I was torn between either a legal career or the lure of investment banking. Having made graduate applications to both law firms and banks, I found myself receiving multiple training contract offers and the only final round investment banking interview I got was at Lehman Brothers! Perhaps this was a sign…
Undoubtedly it was my vacation scheme and subsequent training contract offer from Linklaters which cemented my legal career path. My career in private practice at Linklaters and then subsequently at Nabarro (now CMS) provided a solid foundation for me to hone both legal and commercial skills which I rely upon today at Galliard Homes, as we continue to build our business and now proudly stand as London’s largest private housebuilder.