In the UK, demand for rural property has fallen
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According to property website Zoopla, demand for rural homes in the UK fell as the pandemic trend towards rural relocation eased.
Inquiries for property in areas of Kent known as the Garden of England for their rolling hills and beautiful countryside fell by 0.5% in 2022 compared to the five-year average. Demand fell by 5% in the wider National Park area of the Lake District and by 10% in Mid Wales compared to the same period.
Zoopla defines “enquiry” as an email or phone call to an agent regarding a home for sale.
In April 2020, during the peak of the Covid-19 pandemic, 46.6% of the workforce was working part-time from home, according to the Office for National Statistics. That number rose to 57.2% in London, and there was an exodus from busy urban areas as people sought green cities and coastal villages instead.
“Since the pandemic began in spring 2020, buyers – freed from the daily office commute – have cast their nets farther afield in their search for apartments,” said Richard Donnell, Zoopla’s executive director of research, in a press release.
Most people who started working from home during the coronavirus pandemic plan to work both from home and in an office going forward, according to ONS data, and many companies have ordered a return to work , which apparently caused a turning point in the crisis real estate market.
“The dynamics that have characterized the housing market over the past 5 years are changing. We expect affordable city centers to outperform in 2023,” Donnell said.
The cost of living crisis has also contributed to this shift. From an energy perspective, homes are cheaper to run and, on average, UK homes cost more than double a flat – the highest price in 20 years, according to Zoopla.
Urban areas also tend to offer more employment opportunities.
A difficult environment for buyers
The Bank of England raised interest rates to 3.5% on December 15, pushing up the cost of borrowing for homebuyers. According to Moneyfacts.co.uk, rates on two- and five-year fixed-rate mortgages have risen by more than 3% in 2022.
The UK mortgage market slumped in September following drastic policy changes by then Finance Minister Kwasi Kwarteng. Lenders pulled in hundreds of offers for residential mortgage loans as they tried to navigate the new economic scene.
Some market watchers are now predicting a major downturn in the UK property market as a result of the country’s weakening economy and persistently high inflation.