Restrictions lifting cause city centre boom
- Published: Tuesday 25 May, 2021
- By: Commercial Trust
Good news for landlords with properties in urban areas. According to online estate agents RightMove, demand for city-centre properties has seen a notable increase.
Over the past year, with the pandemic affecting consumer behaviour, bigger family homes were the strongest performers in the market.
With people craving large gardens and more room to accommodate work from home, it is easy to see why.
The estate agent has said that this focus has now shifted to city centre flats with an uplift of 39% in buyer demand when comparing April to January.
This data is based on an analysis of 1.6m property listings on the site and is based on the amount of interest shown in properties.
City centre boom
The easing of Covid restrictions this month has re-ignited the appeal of living in a city centre.
Some cities, such as York, saw buyer demand jump as high as 76%. Norwich saw an increase of 62% and Sheffield, a rise of 57%.
Average property price growth in city centres has been relatively steady since the start of the year. Comparatively, prices across the market as a whole have risen during this time.
Official data published earlier this week showed house prices rose in March by more than 10% in annual terms - the biggest increase since August 2007.
The Office for National Statistics also said prices of detached houses rose by 11.7% in the year to March, compared with an increase of 5.0% for flats and maisonettes.
This means that urban properties have relatively good affordability when compared to the rest of the UK.
The growth in buyer demand for urban locations is now outperforming the growth in rural areas for the first time since before the pandemic started.
High street buzz
Rightmove’s director of data services and overseas, Tim Bannister commented:
“These are early signs but they certainly point to some good news for city centres across Great Britain, with a number of agents now telling me they’ve seen a marked uptick in demand from first-time buyers, and they’re managing to sell city centre flats more quickly than in earlier months of the year.”
“People starting to venture in to their local high streets and once again experiencing the buzz of their city centres, along with greater mortgage availability for first-time buyers, means city centres are staging a much-needed comeback in the market.”
“Right now some buyers are able to grab a relative city bargain compared to the heady price growth outside cities, but these early signs of demand could be the start of city prices rising again, so for those home-hunters who have their sights set on a city-centre flat now is the time to see what’s available.”
Whilst this data is looking at consumer interest when it comes to property purchases, it can be seen in the market that this behaviour is often mirrored in the rental market.
With confidence in the vaccine improving and lockdown restrictions lifting, there will also be individuals searching for city life who are not in a position to get onto the property market despite the new 95% mortgage guarantee scheme
Landlords are in a prime opportunity to fill an essential role of providing homes to these people.
It may be prime time to snap up an investment property in the city while demand is growing, as the focus shifts away from peace and quiet to enjoying the hustle and bustle and seeing people while restrictions ease.
This information should not be interpreted as financial advice. Mortgage and loan rates are subject to change.