A major shift in working patterns as a consequence of the pandemic has created a change in buyer priorities with outdoor space and a room for a home office taking precedence on their wish list.
Whereas people previously flocked to city locations to be in the centre of the action and close to their offices, the hotspots are now in the calmer, more spacious, areas which surround the city, a major study by Halifax has confirmed.
The mortgage lender has analysed its mortgage approvals along with house price data to provide some of the first formal statistical evidence of the ‘race for space’ trend which many in the property industry have been observing over the last year.
Halifax said, since the lockdown restrictions first eased last summer buyer demand had been fuelled in part by a desire for larger properties with more indoor and outdoor space. This had been further underpinned by a shift in people’s work priorities as more workers spent fewer days in the office.
With the Stamp Duty Holiday then introduced, buyers looking for all these features in a new home had the final incentive they needed to go out and buy the much sought-after family-sized homes in the suburbs.
Now it has noticed house price increases in areas surrounding popular cities have been much higher than in the cities themselves.
Big price increases
Indeed, the Halifax House Price Index showed between March 2020, when restrictions began, and June 2021, when the Stamp Duty Holiday began winding down, house prices grew by an average of 8.9% in major British cities.
But in the areas surrounding those cities, the prices grew by a much higher 10.8%.
Some cities saw significant price differences. Take Leicester where the city centre price grew by 6.5% compared to those in the outskirts rising by 12.1% on average. Rutland and Melton prices grew as much as 22.5%.
Then there were the holiday locations – also a hive of activity thanks to the newly-buoyant staycation trend. In Plymouth centre prices grew by 5.8% during the time period of March 2020 to June 2021. But in the nearby area and tourist hotspot of South Hams prices soared by 26.3%.
More property for your money
Andrew Assam, mortgages director at Halifax, said: “The pandemic has had a huge impact on the housing market right across the country. This has been shaped by buyers’ demand for more space, a desire to move from the centre to more suburban locations, and the trend for more home working both now and in the future.
“It’s clear from speaking to our mortgage customers that many have prioritised space over location as a result of more time spent at home working both now and in the future.
“As consumers look for value in the market, that inevitably leads people to look further afield from major city centres, where you tend to get more property for your money.
“We’ve seen evidence of this in areas right across Britain, with house price growth in the vast majority of cities now being outstripped by increases in their surrounding areas.”
