Inner city property roars back as UK reopens

LONDON, UNITED KINGDOM - 2021/02/22: Terraced houses in London as pressure grows on the Chancellor of exchequer, Rishi Sunak for the stamp duty holiday to be extended in the UK Budget, which will take place on on 3 March 2021. The stamp duty holiday, which was introduced on 8 July 2020, is due to come to an end on 31 March 2021. (Photo by Dinendra Haria/SOPA Images/LightRocket via Getty Images)

Family homes were knocked off the housing top spot by bungalows and flats. Photo: Dinendra Haria/SOPA Images/LightRocket via Getty Images

City centre locations and flats are staging a comeback in the housing market, with the easing of restrictions helping drive demand. 

There are signs of buyer demand in city centres and for smaller properties bouncing back, according to an analysis of over 1.6 million properties from the UK’s biggest property website Rightmove (RMV.L).

Buyer demand is measured by the number of people contacting estate agents to request more details about a property for sale on Rightmove.

Data gathered showed that flats have seen the biggest jump in buyer demand since January, up by 39% — replacing family homes which had been the strongest performers in the market.

This was closely followed by demand for bungalows, which saw a 30% increase in demand over the quarter. 

Demand in city centres is up by 35% compared to a 32% jump in demand for villages.

Rightmove found that the easing of covid restrictions has increased the appeal of living in a city centre, leading to some cities seeing buyer demand jump as high as 76% in York city centre, followed by a 62% jump in Norwich and a 57% rise in Sheffield.

Increase in buyer demand by property type, April 2021 versus January 2021. Chart: Rightmove

Increase in buyer demand by property type, April 2021 versus January 2021. Chart: Rightmove

Similarly, if you look at all urban locations and all rural locations across Great Britain, the growth in buyer demand for urban locations is now outperforming the growth in rural areas for the first time since before the pandemic started.

“These are early signs but they certainly point to some good news for city centres across Great Britain, with a number of agents now telling me they’ve seen a marked uptick in demand from first-time buyers, and they’re managing to sell city centre flats more quickly than in earlier months of the year,” said Rightmove’s housing expert Tim Bannister.

Read more: UK property records continue as house prices hit new high

Meanwhile, according to Rightmove, on average, city centres have seen price growth remain flat at 0% since the start of the year, helping some buyers find a relative city bargain.

Another factor driving the housing market right now has been the introduction of the government’s 95% mortgage guarantee scheme. This, coupled with a virtual standstill for prices in many of these city centres has combined to help more first-time buyers get onto the property ladder.

A new study by Rightmove among over 1,000 first-time buyers has found that just under one in five (17%) are planning to use the 95% mortgage guarantee scheme or are already using it.

Watch: How much money do I need to buy a house?