The Wire: Summer 2021 – How the coronavirus pandemic has changed the game for the London property market
(Estimated read time 5 minutes)
How the coronavirus pandemic has changed the game for the London property market
Following the retirement of Gary Festa in December 2020, we’re delighted that Darren Johncock, who has been working alongside Gary for nearly ten years, took on the role of Mortgage Director in January 2021 with a continuing focus on delivering top-class mortgage services and advice to HFMC Wealth clients.
To bolster the team following Gary’s retirement, we welcomed Simon Bromley-Fox to the team in a Mortgage Adviser role last Summer. Simon has over 25 years’ experience within the insurance, estate agency and financial services industries and he is looking forward to developing relationships with clients over the coming months and years.
Gary continues to provide special advisory services to the HFMC Wealth Board as well as a mentor and introducer role for the mortgage team, on a part-time basis.
How the coronavirus pandemic has changed the game for the London property market
One of the most significant lifestyle changes that the pandemic has caused is the move towards remote working for a large percentage of the population. According to figures from the Office for National Statistics, the number of people who did some work at home rose to 35.9% in 2020.
As you can imagine, this change in the way we work has had a significant effect on the housing market as many buyers’ circumstances and priorities have changed. Read on to find out how the pandemic has impacted the London property market.
Many buyers are now prioritising larger homes with a garden and home office
While it may have taken a trip to the Land of Oz to make Dorothy value her home, it took a pandemic to convince the UK public. One of the biggest impacts of the coronavirus outbreak, and subsequent lockdowns, was that many people have completely reassessed their housing needs in recent months.
An obvious example is that when you work from home, the transport links of an area play a much smaller role in the decision to buy a property. If you no longer need to be within an hour’s drive of your workplace, or within easy walking distance of a train or Tube station, it opens up a much wider array of possibilities.
Furthermore, the shift from office-based work to working from home has meant that many people now have different preferences for the home itself. If you’re going to be spending a significant portion of the week inside, it’s important to have a nice environment in which to work.
For example, many buyers prioritised properties with plenty of green space, such as a large garden or rural location. According to market research from estate agent Savills, the percentage of buyers who considered garden space to be important rose from 49% to 62% in the first few months of the initial lockdown. Many buyers have also expressed interest in having a spare room that they can convert into a home office.
Many rural properties are larger, cheaper, and with more green space
Unsurprisingly, this combination of requirements has led to many people wanting to move out of cities and into the countryside where green spaces and larger houses can be found.
Mark Hayward, from the regulatory body Propertymark, was quoted in Forbes Advisor as saying that there has been an “unparalleled increase in demand” in recent months for people looking to relocate to more rural areas.
While young people tend to gravitate towards the cities, many older people have opted for a quieter life in the countryside now they can work remotely.
The advantages of doing so are obvious, as many rural areas tend to have an abundance of green space, more community spirit, and generally cheaper house prices.
For example, let’s say that you decide to sell your home in Wimbledon and move your family further away from London. According to market data from Rightmove, you could reasonably expect to get around £1.1 million for a semidetached property in SW17.
You might then choose to move to somewhere more rural, such as the popular Surrey town of Guildford. Here, according to Rightmove, you could buy a fully detached property for only £871,000.
With this change, you could move to a larger home, in a more peaceful area, and pocket the £230,000 difference. And it’s
still just a 40-minute train journey into Waterloo.
While house prices in London lagged in 2020, experts predict a rebound in coming years
Prior to the pandemic, London typically saw strong house price growth, but this trend was disrupted by the coronavirus outbreak. Throughout 2020, property prices in London were particularly badly affected due to the economic and social disruption of the national lockdowns.
Many people who were able to work remotely chose to leave the noise and stress of city life behind to live in the country. According to figures from Hamptons, published in Forbes Advisor, Londoners bought 73,950 homes outside the city in 2020, which is the highest figure for four years.
The lower-than-average growth in house prices for the city reflected this exodus of wealthy professionals. According to figures from HM Land Registry, the average property price in London has only risen by 4.6% since February 2020.
This lagged significantly behind the annual growth in prices for the country as a whole, which was 8.7%.
However, despite the initial shock that the pandemic had on the property market, there may be hope for a rapid rebound in the near future. While the growth in the first quarter of 2021 has been sluggish, experts predict that it could increase dramatically as the market reasserts itself.
According to data from Savills, published in the Telegraph, growth in London house prices could be as high as 7% in 2022 as life begins to return to normal. Now that shops and businesses have reopened, living in the capital can be an appealing prospect for professionals and young people once again.
