I stumbled across this article on the BBC News website pointing out how the Pandemic doesn't seem to have hurt average property prices in the UK....
However according to Bloomberg's more global analysis it's not quite that simple. It seems that prestige properties in London are down in value while properties on the outskirts of London are increasing in value.
But it's rurual properties which are increasing in value the fastest... Cornwall and Wales have apparently seen the highest increases in demand since the start of the pandemic.
Of course all this makes total sense!
The Pandemic has meant a massive shift to home working, and it seems that many employers are going to allow employees to carry on working from home for at least some days of the week.
This means that if you work in London there is less need to live in the middle of a city of a London - if you only have to commute in three days a week compared to five, it immediately makes paying a premium for a local house or flat less appealing, and makes the London suburbs more appealing.
And similarly for workers the country over - where every you work, the transition to a 3 day week (or fewer days) means it's now more appealing to live further away from work, meaning country properties are increasing in value faster than city properties as a general rule.
And I guess there is also now increased demand for properties in areas with less population density - it kind of makes the new socially distanced normal easier!
This is actually what I thought would happen ANYWAY!
So in 2018 I sold my flat in Surrey (near London) for £240K and bought a house in Herefordshire - in the town centre, but very rural - for £170k. OK I mainly did this because I was quitting work, but I could have bought anywhere in the country, but I chose a cheap rural area thinking there was more potential upside in that than in the crowded South East. Herefordshire is also beautiful. Very wet, but beautiful!
My reasoning was thus.....
Given that it's rational to buy your own home asap, rather than rent, for most people intend on staying in one area for several years or more, it was always quite likely that more rural areas with cheaper house prices would see an increase in value compared to London or other more expensive inner city areas.
Literally millions of people in their early late 50s and early 60s in the UK are currently planning their retirement or looking to downsize and work part-time until they fully retire - and moving OUT of more expensive areas into cheaper areas is an obvious strategy to facilitate this, cashing in some of that capital.
I think Covid and the more rapid shift to online working has just accelerated this shift out of cities, as people look for a better quality of life in a more peaceful region, and more space of course!
Herefordshire hasn't seen the kind of price gains that Wales or Cornwall has, but it's only a matter of time, I guess Cornwall is nicer and Wales, well, started out cheaper, but Herefordshire and Shropshire (next door) will both surely get there turn - this is a trend that isn't going to stop IMO!
Renting out my house is working out nicely
I've still got a mortgage on that place, but its rented and paying off the mortgage - with not too long left on it!
I'm currently in two minds whether to to sell or not, I probably won't as I don't desperately NEED any capital, but a few tens of thousands NOW would be handy so I can buy another house in Portugal and get my land proper sorted, but TBH I think I'm better off long term renting in Portugal and scraping together the money for my land improvements - it was always supposed to be a 'budget, almost no money challenge anyway!.
The problem with rising house prices...
The problem of course is that now property prices are even further out of reach for local young people working in regular jobs - there's now way nurses in Cornwall or Wales or probably anywhere else are now going to be able to get on the property ladder, as it's now even more likely that the old and rich are going to buy up property further out of London.
The solution
I think for the sake of the majority of people under 30 we just need to relax planning laws in the UK - radically! Allow people to build their own homes, live in caravans on small pieces of land, it's the only civilised option compared to what we've got at the moment.
I just can't imagine how bleak this must be looking for people not yet on the property ladder in the UK, it's now EVEN harder to get yer foot on the ladder!