Could the ‘race for space’ finally be over? Throughout the pandemic, homebuyers have looked for larger, often more rural properties. This trend – dubbed the ‘race for space’ – has led to a 16 per cent rise in house prices over the last two years.
According to Rightmove data, this trend has now reversed. In the second half of 2021, urban property demand overtook rural demand for the first time since COVID began. Requests for city residences increased by 35 per cent compared to 2020, especially for flats and apartments.
As renters head back to the big cities, should investors focus their attention on urban properties?
Flats and apartments in demand
Flats and apartments in central locations saw the most significant increase in demand of all, in contrast to earlier pandemic trends. From early 2020, people left cities searching for more space during lockdown. Now, with restrictions easing and life getting back to normal, many are returning to urban areas.
This has led to a surge in city centre rental enquiries. Demand for flats and apartments jumped by a massive 39 per cent compared to early 2021, growing faster than demand for houses or rural properties.
Benefits of city living
Many of those moving back to urban areas are doing so in search of the benefits of city living – benefits that were not available at the pandemic’s height.
Today, renters have already begun to return to London, while other major UK cities, such as Leeds, are seeing increased central demand. Reasons for returning to cities include more attractions and social opportunities – and renters want to be in the heart of the city to enjoy them.
Offices open up
On top of social benefits, we are also seeing renters return to cities for work reasons. The UK government recently announced a return to COVID Plan A, meaning workers are no longer advised to work from home.
We’re now set to see an increased appetite to get back to the office. While some have enjoyed the benefits of remote working, it is thought that much of the increased urban property demand has come from employees moving back into cities.
A work-life balance
A report from Infogrid supports this theory. In a survey of remote workers, results showed that two-thirds of employees want to go back to the office as soon as possible. Reasons for returning include:
- Mental wellbeing
- A better work-life balance
- Getting out of the house.
Above all, only a quarter of all those surveyed felt that they were happier and more productive while working remotely full-time.
As workers return to offices, demand for city-centre rental properties could climb further. This is especially true for properties that offer desirable outdoor features like balconies and shared roof gardens, such as Sky Gardens in the Leeds South Bank area.
Should investors buy now?
The property market has been on a record-breaking run throughout the pandemic. Despite this, flats and apartments have increased in value less than houses and rural properties – leading to flats being labelled “relative city-centre bargains”.
As such, now is the perfect time for investors to take advantage. Recent data from mortgage lender Halifax shows that growth in flat and apartment prices has overtaken increases in house prices for the first time since lockdown.
Invest in Leeds city centre
Demand for properties in the centre of Leeds is up 39 per cent year on year. With renters returning, there’s no better time to invest in property in Leeds city centre. Get in touch to get started today.