Rural house prices soar 16.1% as Brits embrace WFH

/ Isla MacFarlane
Rural house prices soar 16.1% as Brits embrace WFH

David Hannah, principal consultant at Cornerstone Tax, discusses why so many workers have moved away from the city and whether this trend is here to stay.

Following the Government’s winter plan to keep Covid at bay, many experts have called for Brits to work from home to turn a winter spike in cases. After 18 months of changing advice, many Brits have adopted WFH as the new norm, and are unlikely to return. This has left millions looking for larger living spaces, gardens, and ocean or country views, Cornerstone Tax’s landmark research has found that 3.3 million people have moved home, choosing instead to settle away from cities or urban areas. This is reflected in the 10.8% house price growth for homes outside major cities in contrast to just 8.9% growth for city properties.

Data from Hamptons estate agents also shows Londoners alone buying 61,380 homes outside the capital between January and June 2021, the highest number since 2006, with research commissioned by property tax experts Cornerstone Tax illustrating the sentiments behind this:

  • In the past year, over 3.3 million Brits have moved away from a city or urban area
  • 44% of Brits feel that the impact of Coronavirus has made living in a city less appealing
  • 24%, or 4.3 million Brits, will no longer commute into a city for their job post-pandemic

It is clear to see that people are leaving the cities, particularly London, but what is drawing them away?

Bang for your buck

Property has historically been more expensive and more cramped in urban areas, particularly in London. There is now less of a need to pay for commuting convenience, and this means getting more living space for the cost of your city flat. Analysis from the Valuation Office Agency (VOA) has found that the median floor space for houses in England and Wales was 99 square meters, which is about nine typical parking spaces. Meanwhile, the median floor space for a flat is 43 sqm, which is less than the size of four car parking spaces.

Zoopla estimates that the average price for property in London stood at £672,051 in June 2021. In terms of property types, flats in London sold for an average of £539,148 and terraced houses for £727,444. Inversely, Rightmove’s data shows that property prices in Liverpool stand at just £190,323.

Green-fingers

Being in nature or near the seaside has a range of mental health benefits. We all have pleasant memories of a sea-breeze, and being close to trees or in a forest has a proven effect on our cortisol production, which is the chemical that causes stress. Data from Harvard Health shows that just a 20 minute period spent in nature actively reduces cortisol, which causes stress, and that even the physical signs such as muscle tension and pulse rate are measurably reduced within as little as 3 to 4 minutes spent in leafy green surroundings.

With more space comes the possibility of a garden. Before, the only option for a lucky few was to queue for potentially years on the waiting list for an over-subscribed allotment, however a move to a more rural area makes it ever-more likely a garden will fit in the budget.

Zoom shock

The effects of working from home go both ways, with more businesses responding to the workforce’s desires to live outside of cities by building regional satellite offices and shared working spaces. This effect, known as ‘zoom shock’, has been described as bad news for cities as footfall may continue to stay reduced. However, inversely, this is great news for less urban areas, as there is a greater amount of people working, spending and saving outside or urban hubs.

The Government’s ‘levelling-up’ agenda has put a major focus on the economic development of more rural areas, with policies like Free Ports aiming to bring new business and jobs to areas potentially lacking. Although cities will remain vital hubs of commerce and finance, businesses will start to look further afield for talent.

A prime example of this is ‘Britain’s silicon valley’. The eastern end of the M4 corridor is home to a surprisingly large and ever-growing amount of technology companies, particularly in Berkshire, Swindon and the Thames Valley.

Room for activities

Lockdowns have forced many of us to find new passions and activities inside our home; with both new and old crafts and hobbies facing a major resurgence, and more sourdough bread being baked than ever before. A bigger home and a garden gives us more space allows us to pursuit these hobbies. According to a survey by The Healthy Work Company, 22% of respondents had taken up a new pastime in lockdown, while 35% had rediscovered an old one.

Matching major cities for activities, leisure, and cultural experiences outside the house is impossible, but smaller towns and their surrounding areas are giving it their best effort. For example, there are more than 20 Michelin-starred restaurants within a 10km radius of Maidenhead, which is the highest concentration anywhere outside of London.

David Hannah, principal consultant at property tax experts Cornerstone Tax, said: “The commentary around the property market and the Pandemic positions Covid-19 as the only cause for this trend of deurbanisation outlined by property demand and our own data. We don’t think this is quite fair – many of us have long-dreamed of a slower life in the country, and the cultural significance of this dream is nothing new.

“The ubiquitous effects of the Pandemic and the various lockdowns its caused has naturally had a significant impact, mainly by making the culture of work less rigid. The Government’s interferences in the property market has also given many people the impetus to sell their home and buy another. However, where people moved to is not something caused by Covid, but rather, the realisation of many long-term reasons and desires that are becoming ever-more reasonable.”

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