The pandemic changed a lot of things. Not least of which is the British property market which saw a large rural migration. In late 2020 and into 2021, we saw a huge rise in demand for properties with more indoor and outdoor space that offered better value for money. People needed an at-home office space, more room for their family and wanted to be closer to nature. While city centre properties during the same period weren’t nearly as popular.
But now, we are seeing a high demand for inner city properties as people migrate back towards homes in Birmingham. As everything began to settle down post-pandemic and organisations ended the option to work from home, city life became attractive again.
With all this in mind, what educated guesses can we make about the shape of things to come?
To understand why we are now seeing a migration towards buying homes in the city, we should look back at why people decided to move outside of central urban areas in the first place.
During the Covid lockdowns, people became more aware of cramped living situations or the lack of safe outdoor space they had close by. This prompted even those who weren’t considering moving to list their properties for sale. With no need to commute and more time on their hands, moving out of the city was an easy choice. The stamp duty holiday meant gave people even more of an incentive and within days houses were sold. The ‘race for space’ was on.
As the effects on day-to-day life returned to normal, offices increased the number of days required in the office or put an end to working from home altogether. This meant people were spending more time and money commuting. Slowly but surely, the demand for homes in cities increased. The mass desire to live somewhere with a lower population and more indoor and outdoor space cooled off, and people are being drawn back to city properties.
House prices in UK cities have risen 9.2% since the start of the year, as demand for urban property increases. In contrast houses in suburban areas only rose by 7.9% over the same period, according to Halifax. So, it’s clear that city properties are attracting more interest from buyers and renters and the trend of moving to more suburban areas has reversed in many areas of the UK.
In Manchester, the average property is now worth £228,806, having increased 11.5% since the start of 2022. For investors, this has meant a higher sale value quicker than expected, or potential for a higher rental yield.
The real estate chaos caused by the pandemic has certainly mellowed, but we are still experiencing challenging times. In September 2022, the mini-Budget by then Chancellor Kwasi Kwarteng sent mortgage rates into chaos with interest reaching the highest they’ve been since the 2008 global financial crisis. While this is an ongoing issue that is impacting households and investors, there is hope that rates will restabilise. Zoopla reported that tracker rates have started to look good value again, with interest on the average two-year product standing at 3.71%.
For many, the open spaces and better work-life balance suit them perfectly, but some want to move back. After all, it’s hard not to miss the convenience of living in the cultural utopia of a city like Birmingham. The transport options, shops, restaurants, entertainment, and art often draw people back. To discover more about the wealth of city properties in Birmingham, visit our developments page or sign up for our newsletter to get all the latest news, insights and properties straight to your inbox.
