While working from home has become the new norm for many during the pandemic, the overall impact over the last 12 months has generated a pivotal trend in the housing market known as the ‘race for space’.
As buyers have sought after properties that can accommodate space for their home offices, it has in turn driven housing prices up in areas surrounding cities as they seek larger properties in more rural locations.
A recent report by Halifax has identified that, excluding London, house prices grew an average of 8.9% in 20 major cities while areas surrounding those cities grew an average of 10.8% during March 2020 – June 2021.
Now, more than ever, demand for space, both indoor and outside of a property, has outstripped the traditional ‘location, location, location’ motto many estate agents and buyers have used before. This difference in buyer behaviour is a key indicator of how house buyers are prioritising a long-term shift to working from home or at the very least, a hybrid model whereby they split their time between working in an office and at home.
The Halifax report suggests the effect was more evident in coastal cities including Plymouth on the Southwest coast. Here, the city centre saw growth of 5.8% between March 2020 and June 2021 while the average property prices in the surrounding areas rose on average by 16.1%.
The desire to move to the coast was most prevalent in South Hams, with its vastly popular seaside town of Salcombe where property prices increase by an average of 26.3%.
It is widely speculated that a key driving force behind buyers flocking to the UK’s housing market in late 2020 was after England’s first lockdown restrictions were eased in the summer of 2020. It was at this point that house buyers were on the hunt for more space and were far more willing to move to coastal/rural areas with a view that often you get more bang for your buck outside of cities.
Furthermore, with the stamp duty holiday announced last July (2020), reducing the threshold on which tax is paid from £500,000 to £250,000, this further encouraged buyers.
With less of a focus on location and transport links, buyers have been more open to look at properties in suburbs. Yet, it was previously reported that house prices out in the countryside were also seeing growth. Country properties, including cottages, farmhouses and manors rose 2% on the quarter to September compared to the year before according to estate agent Knight Frank.
Cooling of the property market is thought to only last until Spring 2022 as analysts believe that the market will bounce back to pre-pandemic levels. Buyers could potentially re-evaluate their criteria to find bigger houses with more outdoor space however, the steady upturn of those looking for properties outside of cities is believed to continue.