From renters to first-time buyers, those trading up, downsizing or turning their backs on city life for country living, over the last 18 months many people have had to re-think their jobs, lifestyle and the home they live in.
This has had an incredible effect on the dynamics of the property market, especially for those nearing retirement who are keen to move to somewhere new or downsize their current home. Over the next few years, it will become clearer as to whether these changes are temporary or here to stay.
If you’re still working through your finances and options, and haven’t yet decided what to do and when, here are some of the key points worth considering to help make your next move the best one yet.
Latest property trends
When the property market re-opened in mid-May 2020, most expected the uncertainty caused by COVID-19 to collapse property prices. However, to most experts’ surprise, the opposite occurred.
One year on from the first lockdown, property prices are reported to have increased by double digits and rents have risen too. In London, for example, a 6% rise in prices year on year has been reported, while the North West is showing an 18.6% increase.
Although price and rents changes may be different across the UK, there are some general trends that are emerging or being amplified by the current climate:
1. Houses continue to increase in popularity and price versus flats
Whilst not a new trend, there is no doubt that the pandemic has increased people’s desire for outdoor space. That means a house is generally a better purchase choice than a flat, if that’s a viable option. Even if you’re downsizing, buying a house rather than a flat could provide you with more flexibility in the future. That’s also applicable to buy-to-let investors. It’s not just homeowners, but also renters that are now desperate for houses.
2. Moving out of cities to the countryside
While some people may be moving out of cities into more suburban areas, there doesn’t appear to be a big exodus from cities such as London to the South East or ‘the country’. Year-on-year moves from September 2020 to April 2021 vs 2018/19 show that, as a proportion of transactions, Wales actually fell from 5% to 4%, London remained the same at 9% and those moving in and to the South East increased from 14% to 16%. Latest reports suggest that people could be changing their plans as the country opens up.
3. People are more worried about securing the right home than the price they pay
Buying decisions over the last 12 months seem to have focused much more on finding the right home than on sticking to a specific price point, especially for downsizers and upsizers. And it’s these home mover types that are driving prices upwards. This means that you may benefit from current rises when you sell, but this might be cancelled out by the price you have to pay for your next home.
According to a new report from ReallyMoving, not only does the average price paid by each home buyer type vary dramatically, so does year-on-year house price inflation. First time buyers are typically paying just 2.5% more, while upsizers have been shelling out an extra 10% and downsizers a little over 5%.