A new report into Britain’s housing market debunks claims of a widespread exodus from cities to the countryside, finding the “race for space” has peaked.
Bob Pannell – former chief economist at the Council of Mortgage Lenders (CML) – tracked the progress of the housing market over a 27-year period to better understand buyers’ preferences.
His white paper Covid city exodus: reality, reversal or urban myth? was commissioned by the green finance development lender Atelier, and reveals a more complex picture than has previously been reported.
The report finds that in the 12 months to last June, the uplift in sales of rural housing was noticeably higher than for urban, but that this pattern has reversed more recently. The strongest boost to rural sales was actually in the second half of 2020, when growth outpaced urban sales by about 10%. Rural sales growth was about 4% stronger in the first half of 2021, but the current analysis suggests rural sales growth lagged urban by about 7% over the last six months.
“Analysis of more long-term data suggests there have been modest shifts in activity to rural, coastal and other areas that are popular for holidays or second homes, rather than the paradigm shift supposed by many,” the report said.
And while demand for larger homes nationally has been running at elevated levels, there is little evidence of the paradigm shift supposed by many.
Pannell discovered that over the past 18 months, the number of transactions involving detached homes edged up by just 2%, to make up 33% of all sales – and that this may well have been the pre-existing direction of travel anyway.
Examining data from 1995 to 2022, he found the share of detached homes in the sales mix rose from 29% to 33% over the 27-year period. In the period 2015 to 2019, i.e. before Covid, sales of detached homes already accounted for 31% of all transactions.
Against that backdrop, the report concludes the desire for more room “is a trend that has been observable for some years and the effects appear to be incremental rather than breaking new ground. While sales of detached houses have performed a little more strongly than semis or terraces, this is consistent with a longer term trend.”
Graham Emmett, co-founder of Atelier, said: “What is clear from this report is that while Britain’s property map has been redrawn by Covid, any obituaries written for our cities are grossly premature. On the whole, cities remain great places to live and invest in.
“Despite the uncertainty of the past two years, the long-term outlook for the property markets of the major UK cities appears favourable. This striking new data also underlines just how crucial traditional population centres are for the overall economic recovery.
“It also sheds new light on the much-hyped ‘race for space’. It turns out the race has been a marathon, not a sprint – and that larger homes have been steadily becoming more popular among buyers seeking more space or a garden. This demand is about lifestyle as much as about life after Covid.”
