Buyer demand for urban areas

Rightmove reports a notable increase in first time-buyers demand for properties in city centres and urban areas

According to a recent study by the online property portal Rightmove, there has been a notable increase in buyer demand for smaller properties in city centres and urban areas.

Over the past year, the bigger family home was the strongest performer in the marketplace, but Righmove reports that this has now shifted over to flats, which saw the biggest leap in demand. This is when comparing the months of April with January, which is an uplift of 39%.

Buyer demand is measured by the number of people who contact estate agents requesting additional details about a property for sale on Rightmove.

The relaxation of the Covid-19 restrictions has increased the appeal of living in a city centre, with some cities seeing buyer demand jump up as high as 76% in York city centre, followed by a 62% increase in Norwich and a 57% rise in Sheffield.

The average leap in buyer demand for homes in some of the biggest city centres across the UK stood at 35% in April compared to January. This compares to a 32% increase in prospective purchasers who are looking to move to a village.

Similarly, if you look at all urban and rural locations across the UK, the growth in buyer demand for urban locations is now outperforming the growth in rural areas, for the first time since before the Covid-19 pandemic started.

In London, the local areas further afield are still seeing the largest increases in demand, but overall, the inner London boroughs are only just slightly behind the outer London boroughs.

Inner London saw a jump of 30% in buyer demand compared with January, whilst outer London is up by 34%.

A new study conducted by Rightmove amongst over 1,000 first-time buyers, found that just under one in five (17%) are planning to use the 95% mortgage guarantee scheme or are already using it. Which is another contributing factor to this increase in buyer demand.

Approximately two thirds of first-time buyers surveyed, around 60% – said that they were able to save more money towards their deposit over the past year, due to the various lockdown restrictions, as they were spending less. Over half of them – 53% – said this meant they were going to put down a bigger deposit, whilst over a third - 37%, said it meant they could now buy sooner than originally planned.

The study also discovered that the initial desire to move to a quieter location - that had become a growing trend during the pandemic and had been driving a number of local property markets over the past year, does not have the same appeal for first-time buyers.

Rightmove’s Director of Property Data, Tim Bannister said: “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.

“People starting to venture in to their local high streets and once again experiencing the buzz of their city centres, along with greater mortgage availability for first-time buyers, means city centres are staging a much-needed comeback in the market.

“Right now some buyers are able to grab a relative city bargain compared to the heady price growth outside cities, but these early signs of demand could be the start of city prices rising again, so for those home-hunters who have their sights set on a city centre flat now is the time to see what’s available.”