Shift in buyer preferences

Cities start to attract property buyers again

THE COVID-19 PANDEMIC redefined the role of the home and placed new emphasis on its importance, and people looked for more room in order to work, exercise and often teach under one roof.

City centres had become less attractive places to live for those who were not going into an office, or – during the height of the pandemic – were unable to socialise or enjoy the entertainment attractions of urban centres.

There was a surge in buyers during 2020, as people reassessed where and how they wanted to live. Government support through stamp duty holidays, as well as historically low mortgage rates, also encouraged many people to move, or bring forward future plans to relocate.

FLATS BEING IN HIGHEST DEMAND

The biggest demand, and subsequent rise in prices, were for houses in outer city or countryside locations. This resulted in concerns that some local people were being priced out of the market as a result.

But as the COVID-19 restrictions eased towards the end of last year and workers returned to city centre offices, so has demand for properties there. Prospective property buyers have started to return to cities, with flats being in highest demand, according to latest data[1].

BRINGING PEOPLE BACK TO THEIR DESKS

Tenant demand has also increased. The pandemic has resulted in some employers in major cities now encouraging hybrid working models, bringing people back to their desks. As well as professionals, students have also returned to cities as universities return to in person teaching.

The data shows the UK housing market was relatively immune to the economic effects of the pandemic, with demand and price rises remaining high throughout the crisis. UK property prices hit record levels as factors including the rise of home and flexible working fuelled a buying boom outside cities driven by the race for space, with buyers attracted by larger, coastal or rural properties.

“But as the COVID-19 restrictions eased towards the end of last year and workers returned to city centre offices, so has demand for properties there.”

BUYERS WILLING TO PAY MORE FOR SPACE

The data also highlights there has been a long-term shift, with buyers willing to pay more for space and privacy. That means the gap in asking prices between detached and semidetached homes has been stretched.

Some prospective buyers are widening their searches by an average of 50 sq km, perhaps willing to move slightly further away from transport links and High Streets as they spend more time working and entertaining themselves at home.

MOST IN-DEMAND TYPE OF PROPERTY

As workplaces and venues reopened – before the onset of the Omicron variant – the data shows there was a shift in buyer preferences. The slowest rise in prices over the last year was for flats, and demand was much lower than for houses, especially those with gardens. By the autumn of 2021, flats had moved to the top of the list among prospective buyers to become the most in-demand type of property, showing demand to live in London and other major cities has been restored faster than anticipated as employers encouraged people to return to their desks, at least through a hybrid working model.

Source Data: [1] https://www.rightmove.co.uk/news/houseprice-index/

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