Why northern towns are leading the post-coronavirus property surge

Northern English towns are leading the property market’s post-freeze boom as coronavirus pushes buyers away from cities.

Eight of the ten places in England recording the biggest jumps in buyer demand since the housing market reopened were towns in the North, according to property portal Rightmove.

Hereford, one of the two exceptions, took the top spot, with a 77pc jump in buyer demand between June 1 and 14 compared to the first two weeks of March.

But it was closely followed by Wigan in Greater Manchester, which recorded a 71pc jump over the same period. 

Rochdale, Wilmslow, Scarborough and Bolton also had spikes of between 66pc and 59pc. The only other town in the top ten that was not in the North was Hastings on the south coast, which saw an increase of 56pc.

Rightmove measures demand by the number of buyers inquiring on specific properties.

Overall, between June 1 and 14, Rightmove found that buyer demand in England was 32pc higher than in the first two weeks of March.

Why is demand up here?

Affordability is a key driver for demand in these areas. Asking prices in nine out of the top ten locations are below the English average of £337,884 – a sum that would buy nearly two homes in Wigan, where the average price is £165,448.

Meanwhile, demand for homes in London, where the average asking price is £628,284, was up by only 19pc.

Demand for property in towns is far out-performing the cities. Manchester and Nottingham saw similarly small jumps of 21 and 18pc respectively. 

In all of England’s regions, Truro in Cornwall and Newcastle were the only cities that ranked highest by demand.

What are people buying?

Buyers are also seeking more space after lockdown, with family homes achieving the highest prices. A study of 7,000 newly agreed sales found that three- and four-bedroom houses were achieving 98pc of the asking prices, the highest rate of any property type.

Meanwhile, entry-level properties with two bedrooms or less only achieved 97.5pc of their asking prices.

The lower performance in the first-time buyer market is also likely tied to the availability of lending. There are currently very few mortgages available to buyers with small deposits.

This momentum can’t last

Analysts have warned that the current property surge cannot be maintained once the pent-up demand has run its course and the market has to face the economic shock of coronavirus, which has already brought a spike in unemployment.

Lenders are worried about coming house price falls. The Bank of England has forecast a drop in home values of 16pc.

Fears over house prices have prompted Nationwide, the country’s biggest building society, to restrict new mortgage lending to customers with at least a 15pc deposit.

Reduced lending could further induce house price falls in turn, however. If people’s buying power is reduced, or first-time buyers are cut out of the market altogether, the momentum that is driving the market will not be maintained.

Miles Shipside, of Rightmove, said: “Much hinges on the deals that lenders are able to offer buyers in the current market.” 

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