Covid has caused significant changes in the way we view the places we live, and as a result, over the last 12 months there’s been a major move out of towns and cities and in to the countryside.
Studies have shown that lower prices & the chance for outside space have played a role in that decision for people, along with the desire for safer and friendlier places to bring up a family. However, one recent study suggests as many as 41% of those who moved from the city to the country in 2020 put it down to wanting to be ‘around more nature’.
Rents down
That trend might be about to change though. New research by First Mortgage suggests that despite the surge in moves away from the city, one fifth of those who moved in 2020 are planning to return to the city within the next year. This is particularly true of younger people who in many cases gave notice on their city rental homes back in March 2020 & went to stay with friends or family, only to be now considering a move back.
When you look at rental figures in some of the UK’s biggest cities, there’s good reason.
In a recent article (link below), Rightmove said: ‘Our data analysts report that rents in the capital are falling, which has given people a window of opportunity to relocate now before they rise again’.
Time to head back?
It’s certainly seems that there could be bargains to be had. According to their figures, at the end of 2020, inner London’s average asking rents had fallen by 12.4% over the year. Edinburgh city centre was down 10% and Manchester city centre down 5.3%.
So with lockdown restrictions easing, bars, cafes and restaurants opening soon and the promise of life getting back to some sort of normal, it could be a great time to grab yourself a rental bargain.
Sales prices up everywhere
The sales data for cities shows that although some inner cities saw demand fall, prices in most towns and cities have outperformed all expectations. The northern towns have seen the biggest demand thanks to major regeneration and investment projects, significant business relocations and the HS2 rail project. Covid is a major factor though. It’s made people rethink their life choices. They’re willing to foregoe the attractions of the capital now, in order to reap the benefits northern cities in particular have; lower prices, quality of life and the great outdoors right on the doorstep.
Hometrack’s January report shows just how much of an impact the increase in demand has had on prices. Liverpool was the star with a 12-month rise of 6.3% followed by Manchester (6%) & Leeds at 5.8%. (Incidentally this is my tip for the top in 2021/22. Even London prices in the last year rose by 2.9% which is more than you might have thought.
It’s not all good news for renters
There are plenty of places that did buck the rental trend during Covid however. Provincial towns have seen big rent rises for the reasons outlined. You’ll find no such bargains here in Exeter for example (see link below). Rents here have risen here by a whopping 39% in the last 5 years!
Exeter’s fortunes are changing for sure, and what’s not to like? A beautiful Cathedral city, 5 miles from the coast, a top University and schools and Dartmoor right on the doorstep.
So what can you take-away from all this?
- If you want to buy property for investment then look North to Nottingham, Leeds, Liverpool & Manchester. It could also be a great time to get in to London before prices rise again
- If you want to get a rental bargain, don’t delay
- London and South-east rents are down so that’s where you you’ll get the biggest bargains
- If you think the move to the countryside and smaller towns will continue you won’t be disappointed, albeit at a slower pace by the end of 2021
- People are going to get excited about cities again so don’t write them off any time soon
Rightmove article on London rents. March 10th 2021
Exeter’s 39% increase in 5 years. 17th Nov 2020
https://www.devonlive.com/news/devon-news/exeter-sees-highest-rent-increase-4706752
Hometrack price analysis. January 2021
https://www.hometrack.com/uk/insight/uk-house-price-index/