An hour away on the train from London, the cathedral city of Winchester has long appealed to people working in the capital and looking to move out. But the months of lockdown have sent the Hampshire town’s rental market into overdrive, with inquiries over this summer running at 19 times last year’s levels.
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Data from two large estate agents, shared with the Observer, shows that the “race for space” and a desire to prepare for a winter spent mainly at home are rapidly reshaping the property market.
Prices are on the increase in green and pleasant commuter towns, while rents for flats in some areas of central London are sharply down, by up to 20%. The Nationwide house price survey showed the average price of a home in the UK last month was just over £226,000, up 5% on a year earlier, and the fastest rate of increase since 2016.
Some of that increase is down to pent-up demand from those who would have moved during lockdown; some is down to the temporary stamp duty cuts. But Robert Gardner, Nationwide’s chief economist, also points to behavioural shifts as people “reassess their housing needs and preferences as a result of life in lockdown”.
Nationwide pointed in particular to the south-west of England and the commuter towns surrounding London, where house prices were up by more than 5% year on year in the third quarter of 2020.
The most important feature buyers are looking for is a garden. The second-biggest request is a study or home office
Dylan Kinsella, estate agent
Richard Speedy, regional director at Strutt & Parker in Exeter, said his team had had an “unprecedentedly busy” few months, with house-hunters from London, Manchester, Birmingham and Bristol all considering a move to Devon.
After years of inflows into city centres, homes in commuter towns and the countryside are now attracting high interest from tenants and buyers alike.
The agents’ data shows that residents of Wandsworth, a family area of south-west London full of redbrick terraces – and one of the capital’s wealthiest boroughs – seem the keenest to leave.
Estate agent Carter Jonas looked at data from its network showing where London residents are now trying to rent, and found a sharp rise in the numbers searching for homes around an hour from the city. Those looking to quit the capital come from all parts of London, but 37% of them are currently living in the wealthy south-west of the city.
The area of London most people were looking to leave was Battersea, SW11, sometimes called Nappy Valley because of the large number of young families living there.
David Ruddock, Carter Jonas’s head of residential sales, said some of those now looking to rent outside London owned homes in the capital that they were hoping to let.
“Some people are doing it for health reasons: they think it will be easier to isolate outside London,” he said. “Some are doing it for space – there are families where both parents are now working from home and they need to do it. Others are just dipping a toe in the water and trying out somewhere new before they decide.”
As well as Winchester, other sought-after destinations include Oxford and Cambridge. Carter Jonas said inquiries from Londoners looking to move to those cities are up 700% and 460% respectively.
The city seeing the biggest increase in inquiries – albeit from a low base – is York. The number of people currently living in London who now fancy renting a place in the North Yorkshire city instead is 26 times higher than this time a year ago. The train journey from York to London takes two hours, and an annual season ticket costs more than £7,000.
Separate research from Hamptons International shows the median distance those buying outside London are moving this year is 49 miles – up from 33.5 just a year ago.
People living in Manchester are also looking to move a little further away this year – an average of nine miles out of town, compared with less than five miles last year.
Dylan Kinsella of estate agent AP Morgan, which has branches in four commuter towns around Birmingham, has also seen an increase in inquiries from people selling homes in the city centre.
“The most important feature these buyers are looking for is garden space,” he said. “The second-biggest request is a study or home office space.”
James Forrester of Barrows Forrester, another Birmingham agency, said he had seen a shift in interest from young homeowners living in the city centre. “They are moving away from apartments to homes maybe 10 miles away. We have an office in Lichfield and we’ve seen a lot of people looking there.”
In Manchester, Ian Barber of estate agent Yopa said he thought many of those moving out were accelerating plans they already had. “Where we have seen a change,” he said, “is that people don’t feel they have to be near commuter lines now.”
Winners and losers
▲ Tenants who want to live in areas that have previously been unaffordable for them may be in luck. Landlords in some parts of London – both central and suburban – have reduced rents by 20%.
▼ Tenants in new hotspots may be less lucky. Estate agent Carter Jonas said it had recently marketed a rental property in Cambridge for £1,900 a month – £200 more than a similar home would have fetched in the summer – and had three offers within 48 hours.
▲ Landlords with properties with outdoor space, including balconies, are winners – these are proving popular all around the country. “Ground-floor properties used to be the hardest to let,” says James Forrester of Barrows & Forrester in Birmingham. “We have seen a big shift towards them now, as they tend to come with an outdoor terrace.”
▼ Landlords in central London are faring badly thanks to a lack of demand from young professionals and international students. Commercial landlord Shaftesbury recently said a fifth of its 662 apartments were lying empty.
▲ Sellers in the south-west of England and commuter towns surrounding London have seen prices rise by more than 5% since last autumn, according to Nationwide’s latest house price index.
▲ Sellers of homes worth £1m-plus are getting offers more quickly than last year, with Rightmove reporting that the average time to sell such a home has fallen from 81 days to 63. Buyers are increasingly looking for space, both inside and out, and the homes that offer it are selling fast.
▼ First-time buyers are struggling with a shortage of low-deposit mortgages to help them get on the housing ladder. On Monday, Yorkshire building society’s broker arm, Accord, will start offering fixed-rate 90% mortgages for just two days, before pulling them. Only a small number of other lenders are providing similar deals, amid concerns about a deluge of applications.
▲ Home movers can get a two-year fixed rate mortgage at just 1.24% from Virgin Money – 2 percentage points lower than the best deal on offer on a 90% mortgage. With Barclays, they can fix their rate for 10 years at 1.99%.
The Hampshire factor
Wandsworth’s loss could be Winchester’s gain. Lavender Gardens in London’s Battersea is a “sought-after street”, with its attractive £1.5m-plus terraces close to Clapham Common. But the number of estate and letting agent boards on this short road suggests that people are on the move. Data shows that SW11 residents are leading the post-lockdown trend for quitting the capital. And many have their sights on Winchester.
Estate agent Carter Jonas reported a huge increase in inquiries from Londoners about Winchester. Several letting agents in the city said they had seen such a surge that there was now a severe shortage of properties. “The biggest difference is it is families leaving London, rather than singles,” said one local agent.
The move makes financial sense: monthly rents in Winchester start at about £400, according to Rightmove, with the average just over £1,300. Average rent in Wandsworth is £2,400, according to Home.co.uk.
One big plus point of Winchester is that the fastest trains to London Waterloo are within the magic one-hour commute time – 54 to 57 minutes – manageable if office hours are only two or three days a week. Rupert Jones