City dwellers move to suburbs in race for space
Buyers are seeking out more spacious homes in the suburbs, according to Halifax.
The lender said that the impact of the pandemic on people’s lifestyles has driven stronger house price growth in areas surrounding most of Britain’s biggest cities.
It analysed mortgage transactions between March 2020, when the first lockdown restrictions were introduced, and June 2021 when the Government’s Stamp Duty holiday began to be unwound in England and Wales and found that house prices grew by an average of 8.9% in major British cities.
But in the areas surrounding those cities, average house price growth was much higher at 10.8%.
For example, in Plymouth, the city itself saw house price growth of 5.8% between March 2020 and June 2021, while in the surrounding areas, the average was 16.1%. This was driven by the likes of South Hams – home to Salcombe, Britain’s most expensive seaside town – which at 26.3% has seen exceptional house price increases during the pandemic.
In Leicester, house prices in the city grew by 6.5% over the same period, compared to a rise of 12.1% on average in the surrounding area, with Rutland and Melton up by 22.5%.
Race for space
Halifax said that buyer demand has been fuelled in part by a ‘desire for larger properties with more indoor and outdoor space’, as people’s work-life balance changed during the pandemic and we spent fewer days in the office. The Stamp Duty threshold being raised to £500,000 provided even more incentive for those buying larger, family-sized homes.
Plus buyers perceive they’ll get better value for money outside of city centres.
Andrew Asaam, 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 over the last year and a half. 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.”