The Covid-19 crisis has led to some big questions about the future of cities, and whether enough people will live in big metropolises going forward.
While the emigration seen in the first months of the pandemic has begun to reverse as society reopens and more people return to the cities for leisure, work, sports and cultural opportunities, there was certainly a shift in priorities and a shift towards localism for many, which could have long-term consequences for big cities — no more than London.
Here, Michelle Niziol – a real estate investment expert, businesswoman, entrepreneur, keynote speaker and former candidate at The Apprentice – looks at whether the London real estate market has been killed for good by Covid, or whether it will bounce back now that restrictions are easing.
The pandemic threw us some huge basket balls … being on national lock, wearing masks out in public and humming the tune ‘Happy Birthday’, just in case we forgot how to wash our hands properly.
Something that no one could have predicted was the rapid speed of people who wanted to move out of cities, especially London. The hub in Britain has never had a lack of interest; despite the squeezing rent and terrible traffic jams, it has always been the most sought after place to live in the UK.
Last year, a whopping 39% of people living in London who wanted to move searched for a property outside the city. This came as a big shock at the time, but has since jumped to over half (52%), resulting in London no longer being the most sought after place to live, handing over its crown to Cornwall, according to a recent article in Harrogate – advertiser.
Urban dwellers leave the big smoke and head towards the countryside in search of greener pastures. With London’s limited space and huge expenses per. Square meters compared to other places, people were able to find much more for their money with the extra luxury large open spaces and private garden options.
Security measures introduced due to the pandemic required that we keep as much space and distance to people as possible, as well as spend more time outdoors. Despite this no longer being the case, people quickly realized the benefits and pleasures that come with that lifestyle and have since continued to do so.
With the influx of flexible work that has continued in the last days of the national lockdown, the desire to work from home to establish a healthier and more balanced work and home life has been a major priority for many.
Gone are the days of working 9-5, five days a week in the office. For many, this is just no longer a realistic depiction of people’s working lives. The need for huge office space is dwindling, many companies still operate remotely and do not intend to keep their large offices for their staff. Just one more nail in the coffin to keep people away from staying in town.
The drive is now primarily focused on space inside and outside their home.
The real estate market outside London thrived in the midst of the pandemic with people desperately wanting to move from a home they realized no longer suited their needs. With this desperation to stick up came the opportunity for people to earn more on the sale of their house.
Property prices have risen since before the pandemic, with property values now 10.2% higher than a year earlier – the fastest annual growth rate in 14 years, with the largest price increases outside London and the South East.
It is important to note that the fraction of Londoners not affected by the lack of home space quickly returned from the initial impact of the border closures and the general flow situation. Prime London property is occupied by those whose income would not have been jeopardized by the pandemic and therefore remain unaffected.
The SW1Y postcode saw an average selling price in the area rise by 54%, a complete anomaly compared to the rest of the London real estate market.
Despite international travel restrictions, foreign investors were still eager to get ahead with their purchases, and some were happy to buy without even seeing.
The race for space is still evident, and as much as the real estate market in London will take up again, it has taken a hit that is unlikely to be fully reversible.
The past year has given everyone the opportunity to reflect on what they believe is important and how we can maintain the best possible quality of life.
Going forward, of course, the hum will return to the city, and slowly it will be rebuilt by house hunters, but it is unlikely that it will ever reach the state it was before Covid-19.
* Michelle Niziol specializes in offering tailored real estate investment advice and is the founder of a number of real estate related companies. She also appeared as a participant in the 2016 version of the hit BBC One show The Apprentice