Rural Home Demand in Britain Declines as Pandemic Impact Wanes, Study Finds

The demand for rural homes in Britain has decreased as the trend of relocating to the countryside during the pandemic has faded, according to the real estate website Zoopla.

Inquiries for properties in the Kent area, known as the Garden of England, dropped by 0.5% in 2022 compared to the five-year average. In the wider Lake District national park area, demand dipped 5% compared to the same period. In mid-Wales, inquiries fell by 10%.

Zoopla defines "demand" as contacting an agent via email or phone to inquire about a specific home for sale.

In April 2020, during the height of the Covid-19 pandemic, a majority of people in employment did some work from home, according to the Office for National Statistics. That figure rose to over half in London, and there was an exodus from bustling urban areas as people sought leafy towns and coastal villages instead.

Since the pandemic began in spring 2020, buyers have been casting their home-searching nets further afield, freed from the daily office commute, according to Zoopla’s Executive Director of Research Richard Donnell.

According to data from the ONS, most people who started working from home during the coronavirus pandemic plan to work both at home and in an office going forward. Many companies have mandated a return to the workplace, which appears to have caused a pivot in the housing market.

Donnell said that the dynamics that have shaped the housing market over the last 5 years are shifting, and that he expects affordable urban centres to fare better than average in 2023.

The cost-of-living crisis has also contributed to the shift to apartments. Apartments are cheaper to run from an energy perspective, and on average, U.K. houses are more than twice the price of an apartment — the highest in 20 years, according to Zoopla.

Urban areas typically have more job opportunities than rural areas. This is due to the higher population density in cities, which creates a greater demand for goods and services. As a result, businesses in urban areas are often able to offer more positions.

The Bank of England raised its interest rate to 3.5% on Dec. 15, increasing borrowing costs for homebuyers. According to Moneyfacts.co.uk, both two- and five-year fixed mortgage rates have increased by more than 3% during 2022.

The U.K. mortgage market was thrown into turmoil in September after then-Finance Minister Kwasi Kwarteng made drastic changes to economic policy. Lenders withdrew hundreds of residential mortgage deals as they struggled to adapt to the new economic landscape.

Some market analysts are now predicting a major downturn in the U.K. property market as a result of the country’s weakened economy and sticky high inflation rate.