The financial impacts of Covid have meant financial hardship for some, while others have been forced to find new ways to work and do business.
The phenomenon of working from home has been one of these new developments. Although it has been technically possible for years, thanks to the internet and technologies such as Skype, Zoom and Microsoft Teams, remote working had a relatively small impact.
Lockdown changed all that, with employees discovering the joys of work without commuting, and employers the joys of not needing costly office space for every member of their team.
But the rise of working from home may be having an effect on the property market. At Continuum we are looking at what this effect may mean for your property plans.
The post Covid property market
It is no secret that the property market is booming. Home seekers that put off moves during the worst of the crisis are now out buying, and with the Stamp Duty Land Tax holiday and low interest rates stimulating the market, prices are on the up.
There may have been a slight step back in March, but Mortgage lender Nationwide reported that British house prices jumped by 2.1% in April, their biggest monthly rise in more than 17 years.
But this general increase hides the important details – which sectors, and which locations are seeing the greatest demand, and the biggest increases in sales prices.
The facts seem to suggest that the working from home movement is changing the type of homes that are being most sought after.
Sales of flats may be down. Larger homes and especially those with gardens and garages may be seeing the greatest increase in demand and in price. Homes in city centres may still be selling, but the real growth areas may be in towns and villages away from the usual commuter areas. Property values in some less densely populated areas have risen almost twice as fast as those in urban hubs.
What are the new driving factors?
The pandemic has prompted working from home and consequently a search for space, both inside and outside homes. This makes larger homes, with a fourth or fifth bedroom to use as an office, or a garage that can be converted among the most desirable.
But as always when looking at property, location is the most important factor of all. For most of the last century, the most desirable homes were those close to places of work, or failing that, close to a commuter route that would put work in easy reach.
The stratospheric prices of central London and the steady wave of gentrification which swept across Islington in the latter part of the 20th century to engulf parts of Hackney in the 21st were all triggered by proximity to well paid jobs in the City and nearby.
The need to be close to a tube, overground or a bus route is suddenly less important when the trip to work has become stepping into a spare bedroom.
The fact that the price of a one bedroom flat in a city centre is enough to buy a three or four bed house in a country town may be prompting the new phenomenon of urban flight.
Urban flight sees people moving out of cities to towns and villages and is driving up house price rises in rural areas. Since February 2020, prices had gone up by more than 10% in the least densely populated 10th of local authorities in the UK, compared to rises of 6% for the most populous deciles.
Cornwall has overtaken London this year as the most searched for location on property site Rightmove, according to the BBC. Neighbouring Devon sits in third, and Dorset has risen from 20th to 10th. Even areas such as the Isle of Skye and Braemar in the Cairngorms National Park have seen increases in interest.
The appeal of a rural or coastal life, confidence in improving broadband, and the attraction of indoor and outdoor space are linked directly to the lifestyle forced upon most people in the last year. Many have turned a long-term plan to escape to the country into action.
Are you considering becoming an urban flyer?
It is certainly true that there is a growing interest in rural properties and those away from traditional property hotspots, simply because larger homes are more affordable.
Of course, if you are considering such a move, getting the right mortgage will still be vital. At Continuum we can search the entire market to find the mortgage product that is right for you.
The information contained in this article is based on the opinion of Continuum and does not constitute financial advice or a recommendation to suitable Mortgage products, you should seek independent financial advice before embarking on any course of action.
Your home may be repossessed if you do not keep up repayments on your mortgage.
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