The UK property is undergoing a massive shift, which may well become permanent. Of course, In the short term, Covid-19 caused a sharp contraction in property market activity: mortgage lending declined almost overnight, especially for first-time buyers; sales ground to a halt, while existing home owners found their options dwindling due to being furloughed.
There are indications, however, that a set of deeper changes is afoot. For one, home working has reshaped people's needs, and along with them, their housing requirements.
Speaking to the Property Reporter, Nicky Stevenson of Fine & Country pointed out that the home working trend is likely to shift 'consumer behaviour' where it comes to housing: 'working from home may become more common, shifting the relative importance of commute times, broadband speeds and home offices.'
London workers in particular may be reassessing whether buying at exorbitant prices in London is necessary, turning their attentions towards the countryside. London is experiencing a stagnant property market, with sales down by a quarter since March, and not showing much of a sign of recovery.
On the other hand, estate agents are reporting a sharp rise in demand for sparsely populated areas of the UK such as Devon and Aberdeenshire. The north west of England is also booming, with demand almost back up to pre-lockdown levels.
It's also becoming clear that the regions are attracting buyers with serious cash – away from London flats and towards larger homes with gardens in the regions. Sales of homes with a value of over £1 million were up 16 per cent as of last week from early March. As more people plan to work remotely indefinitely, the demand for a higher-quality, more spacious home environment has grown.
Richard Donnell, Director of Research & Insight at Zoopla, said:
'The rebound in housing demand over the last month is not solely explained by a return of pent-up demand. COVID has brought a whole new group of would-be buyers into the housing market. Activity has grown across all pricing levels, but the higher the value of a home, the greater the increase in supply and sales as people look to trade up. New sales in London are lagging behind as buyers look at commuting and moving into the regions.'
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