Cities are attracting more property hunters with demand for flats outstripping that of houses in the autumn, the latest sign that the pandemic-fuelled “race for space” could be waning.
UK property prices hit record levels during the pandemic as factors including the rise of home and flexible working fuelled a buying boom outside cities.
However, as staff returned to offices with flexible and hybrid working patterns through the autumn – prior to the emergence of Omicron – interest in flats has surged.
“When the housing market reopened in May, there was an immediate rush for room from buyers to look farther afield from the capital,” said Tim Bannister, the director of property data at the property portal Rightmove.
“However, in recent months we’ve seen higher demand to live near London, with buyer inquiries returning towards pre-pandemic levels. This is happening quicker than some will have anticipated, and is likely driven by many businesses encouraging a hybrid, rather than fully remote working model.”
Rightmove said that flats had become the most in-demand property type among prospective buyers, supplanting the popularity of houses throughout the pandemic.
“The complete reversal in demand from bigger houses to flats paints a picture of society opening up again and a group of people looking to be closer to city centres,” said Bannister.
“Although there was less demand for flats when the market reopened, with more availability than other property types, and more steady average asking price growth over the last year, flats could be a good opportunity for people looking to move or to get on to the ladder next year.”
Rightmove’s findings chime with trends identified by mortgage lender Halifax, which found that in November flats were changing hands for 10.8% more than at the same time last year, while detached houses were typically fetching 6.6% more.
Despite the boost in popularity of flats, Rightmove said the longer-term trend towards bigger houses, in outer-city and rural or coastal locations, is here to stay.
Prospective buyers have widened their searches for their ideal home by an average of 50 sq km (19 sq miles), according to Rightmove.
In October, the typical asking price for a detached house was 76% higher than a semi-detached property.
Sign up to the daily Business Today email or follow Guardian Business on Twitter at @BusinessDesk
“The pandemic redefined the role of the home and placed new emphasis on its importance, and people looked for more room in order to work, exercise, and often teach under one roof,” said Bannister.
“People have extended their search area, which suggests there isn’t as much reliance on being near key transport hubs, or realising that living just a bit further away from the high street could open up more properties that a buyer can afford, or they may get more for their money.”
Last week, Halifax forecast that the boom in UK house prices is likely to end next year as household finances become increasingly stretched.
