Rising demand for larger properties after lockdown is being “balanced out” by lenders tightening affordability.
Asking prices in the second-stepper sector of three- or four-bedroom homes hit a new record of £291,618 in September, according to Rightmove, fuelled by buyers looking for more space, such as to work from home.
Corey Whelan, director at Cambridgeshire Money, noted a 4.86 per cent increase in the average property price across Q3 with regard to mortgage applications at The Money Group.
Mr Whelan said: “I think it’s fair to say we are seeing demand for larger properties. Considering our 4.86 per cent increase in prices across the quarter it appears Covid could be playing a part in that, with maybe after lockdown people getting sick of the same four walls and realising they don’t have enough space thanks to being confined to it this year.”
But Alex Kemp, partner at Ideal Mortgage Advisers, said he still felt there was a market for smaller properties.
Mr Kemp said: “Ultimately whilst buyers who intend to work from home in the future would like more space, this is also balanced out by the tightening of affordability by mortgage lenders, and the lack of options at 90 per cent and above.”
Mr Kemp added his firm had seen an increase in people remortgaging to release funds to extend their properties as a cheaper and quicker alternative to moving.
Alongside demand for larger properties, interest in smaller communities has also grown.
Tim Bannister, director of property data at Rightmove, said it was clear the short-term shift in desire to move to the country, smaller towns and villages had turned into a medium-term trend.
Analysis by the property portal found that areas where property searches in September had doubled have a population of less than 11,000.
The village of Lightwater in Surrey, for example, saw buyer searches rise by 130 per cent year-on-year in September. Searches in London, meanwhile, were up 36 per cent.
According to Rightmove, the interest in smaller communities has also translated to offers. The town of Dartmouth saw the largest rise of 179 per cent in the number of properties being marked as ‘sale agreed’ by estate agents across Great Britain.
It comes after a study by Ipsos MORI found the experience of living through lockdown had changed people’s wish lists for their housing and the areas they live in, as nearly half (49 per cent) said proximity to green spaces had become more important.
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