More people set to leave London as property preferences change

 

Property investors reassessing their future investment prospects may want to look at the way people’s lives have changed post-Covid in order to stay ahead of the market.

What people want from their homes and local areas has shifted, and for many this change will be permanent. The idea of ‘home’ now encompasses much more than it did before lockdown. It is now a multifaceted space, and location could be even higher on people’s priority lists.

A new survey from PricewaterhouseCoopers (PwC) suggests that the UK housing market could “rebalance” as a result of changing trends. How the various parts of the country will fare, though, will ultimately depend on how the economy continues to recover.

One takeaway from the report suggests a high number of people considering leaving London. More than a third (34%) of 45-64-year-olds living in the capital “expect to move to a different region outside of London next time they move”. This is a 16% increase compared to pre-Covid.

Rise in home-working means new priorities

According to the latest ONS data, two in 10 adults are continuing to work solely from home. Back in June, this figure was four out of 10. The important thing will be whether or not this continues to be the case for many UK workers. This could also play a part in whether people still want to be based in London, or will opt for the enhanced work-life balance that often attracts people to the regions elsewhere.

PwC conducted a survey looking at working habits and home moving plans before and after lockdown. The results found that the future of work is “likely to evolve more quickly than it would otherwise have done”.

Those in the business services sector, including financial services, professional services and information and communication services, are the most likely to work from home more in the future. This sector makes up around 15-20% of all UK employment. On average, workers expect to spend 3.3 days a week in the office, compared to 3.7 days pre-Covid.

The situation is different for those working in manufacturing or retail. These workers actually expect the number of days spent in their place of work to increase. This could reflect a change in behaviour due to lost income.

The report writes: “For the residential property market, a shift towards working from home more in the future, particularly for the business services sector, could have an impact on housing demand in terms of the location and types of property being sought.”

Skilled workers moving away from London

The lockdown over the summer has heightened the need for many people to have more space. This is particularly the case with the older generation living in London, the research shows.

“As remote working becomes more common, moving to other parts of the country, to take advantage of lower housing costs…or to be closer to family or a higher quality of life, could become an increasingly attractive proposition.”

According to PwC, this trend – which already existed with more people leaving than arriving in London from other parts of the country – could accelerate now. In the over 45 age bracket, a third of Londoners expect to move to a different region. The survey also shows there are more people who are unsure what they will do now than before Covid.

However, most of those in the 25-44-year-old age bracket living in the capital are renting. This means their next move could be sooner, and may involve moving to another rented property.

Barret Kupelian, senior economist at PwC, said: “It’s difficult to predict the impact that COVID-19 and an increase in home-working could have on house prices, but our research points out that potential house buyers are considering moving to smaller towns, villages and suburban areas, more so than before the pandemic.

“If this materialises, it could help rebalance some of the housing market in favour of the regions. The regions we expect will benefit the most from this change are those with good transport as well as digital links.”

“This could have a variety of implications for businesses but also for local authorities, which will need to plan for this type of change.”

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More people set to leave London as property preferences change

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