Dead City: has the pandemic killed off the London property market?
The pandemic threw us some huge curveballs…being on a national lockdown, wearing masks out in public and humming the ‘Happy Birthday’ tune just in case we forgot how to wash our hands properly.
Something that nobody could have predicted was the rapid rate of people looking to move out of cities, London particularly. The hub of the UK has never had a lack of interest; despite the extortionate rent and horrendous traffic congestion, it has always been the top searched place to live in the UK.
Last year, a huge 39% of people living in London looking to move were searching for a property outside of the city. This came as a huge shock at the time, but has since jumped to over half (52%), resulting in London no longer being the most searched for place to live, handing its crown over to Cornwall, according to a recent article in the Harrogate Advertiser.
City-dwellers are leaving the big smoke and heading for the countryside in search of greener pastures. With London’s limited space and huge expense per square metre compared to elsewhere, people were able to find much more bang for their buck with the added luxury of large open spaces and private garden possibilities.
Safety precautions introduced due to the pandemic required us to keep as much space and distance from people as possible, as well as spending more time out in the open. Despite that not being the case anymore, people soon realised the benefits and enjoyment that come with that lifestyle and have since continued with it.
Also, with the influx of flexible working that has carried on past the days of the national lockdown, the desire to work from home to establish a healthier and more balanced work and home lifestyle has been a huge priority of many.
Gone are the days of working 9-5, five days a week in the office. For many, this just isn’t a realistic depiction of people’s working lives anymore. The need for huge office spaces is dwindling, many businesses are still operating remotely and have no intention of retaining their large offices for their staff. Just another nail in the coffin to keep people away from staying in the city.
The drive is now primarily focussed on space inside and outside their home.
The property market outside of London thrived in the midst of the pandemic with people desperately wanting to move out of a home they realised does not fit their needs anymore. With this desperation to up sticks came the opportunity of people making a bigger profit on the sale of their house.
Property prices have soared since before the pandemic, with property values now standing 10.2% higher than a year earlier – the fastest annual rate of growth for 14 years, with the biggest increases in price being outside of London and the South East.
It is important to note that the fraction of Londoners who are not impacted by the lack of home space bounced back from the initial impact of the border closures and general state of flux very quickly. Prime London property is occupied by those whose incomes would not have been put in jeopardy by the pandemic and therefore remain unaffected.
The SW1Y postcode saw an average sold price in the area climb 54%, a complete anomaly in regard to the rest of the London property market.
Despite international travel restrictions, overseas investors were still keen on progressing with their purchases, and some were happy to buy without even viewing.
The race for space is still evident and as much as the London property market will pick back up, it has taken a hit that is unlikely to be fully reversable.
The past year has allowed everybody to reflect on what they believe is important and how we can maintain the best possible quality of life.
Moving forward, the buzz will of course come back to the city and slowly it will be reignited with house hunters, but it is unlikely to ever reach the state it once was before Covid-19.