Move To The Country Property Trend Fading - Zoopla

A trend of moving to rural and coastal areas is fading and affordable towns are becoming more of a draw, according to property website Zoopla.

Demand for larger, more remote homes surged during the pandemic as people looked to live and work out of town.

But the property portal suggested that trend had run out of steam.

Higher mortgage rates were leaving potential buyers with an affordability challenge, it said, which would push down house prices in general.

Mortgage lenders the Halifax and the Nationwide are predicting UK house prices will fall next year, by 8% and 5% respectively.

However, Zoopla said that the smallest falls were likely to be seen in more "affordable" urban areas, and among flats.

"House prices are going to come under the most pressure in the most expensive markets, because with higher mortgage rates it just hits buying power that much harder," Richard Donnell, executive director of research at Zoopla, told the BBC.

"I think London and the South East are going to bear the brunt of price falls next year... but actually in many parts of the North, the Midlands, rural Wales, housing is not fundamentally overvalued... so you're not going to see as big a fall in those markets."

In recent years, Covid lockdowns led homeowners to reassess where and how they wanted to live.

The pandemic accelerated a shift towards remote working, and brought big savings for some parts of society. Government support through stamp duty holidays and the historically low mortgage rates at the time led to a rapid increase in the number of buyers looking to move to larger, more rural properties.

Property prices in areas of the Yorkshire Dales, the Derbyshire Dales, North Norfolk, and the Cotswolds all shot up.

In recent months, the partial return to the office and the soaring cost of living caused the picture to change for many people.

Chris Druce, senior research analyst at estate agent Knight Frank, said: "After a frenetic period for the country market, city living has come back strongly as workers have returned to the office, and the lifting of pandemic restrictions has boosted the appeal of urban living."

Zoopla's research suggested that places such as Bradford, Swindon, Coventry, Crewe, Southend and Milton Keynes were seeing above-average demand for homes.

Another UK property portal, Rightmove, said that London was cementing its position again as the area which is most searched by users.

During various months last year, Cornwall had overtaken the city as the subject of most searches.

However, this year, London - which has the biggest population - was clearly at the top and had stretched its lead. Cornwall remained in second on the list, followed by Devon, Bristol and Glasgow, Rightmove said.

Ultimately, 2023 is expected to see falling prices and fewer transactions, according to analysts.

The Nationwide Building Society said that squeezed incomes and economic upheaval would have a significant impact on the housing market.

"But there is still a good chance that we can achieve a relatively soft landing next year with activity stabilising modestly below pre-pandemic levels and house prices edging lower," its chief economist, Robert Gardner, said.

Iain McKenzie, chief executive of The Guild of Property Professionals, said: "The overall picture remains mixed as we finish the year as house prices are expected to fall, but that readjustment could spur demand as buyers search for a good deal."