It felt as though we spent an awfully long time in the early stages of the pandemic hearing about how city centre living was all but over thanks to working from home and the lack of demand for property in more built-up urban centres.
The accepted wisdom at that point was that most hadn’t chosen to live in city centres for any other reason than proximity to their place of work, however, this now looks to have been disproved as people seem to be returning to city centres in droves.
Areas such as London, Manchester, Birmingham, Leeds and Liverpool were expected to fundamentally see their housing markets change, with many opting out of busier, costlier urban living, instead preferring the relative serenity and peace of suburban or countryside living.
There were certainly moments where trends were starting to point to this new reality, with demand and rental growth stalling in these once competitive areas, but now that many companies have fully adjusted to the ‘new normal’ it’s becoming apparent that not only is city centre living still popular, it’s actually necessary.
Recent figures released by Zoopla and reported on by the BBC show that city centre rents have started to increase quickly again.
According to the report, “Many students and young workers who were working from home returned to live with their parents, and international travel restrictions reduced medium-term overseas visitors.
Zoopla said that the gradual return to the office, and well as the general winding down of Covid restrictions, had boosted the rental market.
It said demand for rental properties in January was up 76% compared to an average January in each of the previous four years.”
This perhaps isn’t surprising in recent context, but it did look for a while as though a permanent change was taking place, so this will come as welcome news to property investors and landlords who may have been reconsidering further investment in these types of areas.
Undeniably, city centre and town centre apartments and buy to let property remains one of the best investment assets in the UK and across Europe.
It’s unlikely that property will rise in value by 10% again this year, as it has done for the previous two, however, there is strong data to suggest that rental demand and rental growth remain high.
This is mainly down to the fact that house building simply isn’t keeping in step with demand and as more students and workers return to these areas following a slow down in activity during the pandemic, this is likely to be accentuated further.
If, as an investor, you’ve been considering whether to put your money into property in the UK, in particular in city centre property, then there is very little that can compete with this asset class for return on investment in terms of both growth in value and passive income.