Demand for different types of housing has shifted dramatically during the pandemic, and it remains to be seen if this will be permanent as we emerge out of lockdown.
The main emphasis during the pandemic has been on homes with more space, inside and outside, in predominantly rural areas.
This has been the case in both the home ownership market and the private rented sector.
This is a trend that’s highlighted in a new rental report from The Mortgage Works, the buy-to-let arm of Nationwide Building Society.
It found that the share of rented households in England edged down for the third year in a row in 2020, to 18.7 per cent, from 19.3 per cent in 2019.
It suggested that tenants were most likely to be moving or considering a move, at 40 per cent of those surveyed, compared with 32 per cent of homeowners with a mortgage and 20 per cent of those who owned their home outright.
Robert Gardner, Nationwide's chief economist, explained that the lockdowns led many people to reassess their housing needs. This boosted housing market activity even as the economy slowed sharply.
He said: “In the rental sector, the desire to move as a result of the pandemic was prevalent across most regions. It was particularly marked in London, where over half of tenants were moving or considering a move.”
He added: “Among those in the rental sector either moving or considering a move, a desire to move to a different area was a key motivating factor with around a third of respondents citing this.
“The majority were looking to move to a less urban environment, with nearly 60 per cent looking to move to a smaller town or city or a village/rural location, compared to 16 per cent moving to a larger town or city. The remainder were unsure or looking to a similar sized place.
“Other reasons for moving included seeking better access to outside space, with around a quarter of respondents mentioning this, while 23 per cent were seeking a larger property.”
Mr Gardner explained that it’s unclear if this trend will continue. This is partly due to the vaccine rollout that has helped the country emerge out of lockdown.
People are beginning to see restrictions lift and some are returning to their offices, which will often be in urban areas.
However, some companies – including Nationwide Building Society – have already announced that employees can work from home permanently if they wish. This offers more flexibility for people when thinking about where they want to own or rent a home.
Mr Gardner said: “As well as the uncertainties surrounding the broader economy, it is also unclear the extent to which shifts in housing demand will persist, and the extent to which people will act on them in the years ahead.
“If demand permanently shifts away from more densely populated locations and property types, this could have an adverse impact on the rental sector in aggregate, given that the privately rented housing stock is more concentrated in urban locations.”
What do you think of this shift in demand? Let us know in the comments.
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22 June 2020 • 9-minute read
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