The property market is witnessing a notable shift, with a significant number of Brits downsizing and relocating to cities in response to increased mortgage rates and the lure of accessible facilities.
A landmark study from Cornerstone Tax 2020 – the UK’s leading stamp duty specialists – shows that 11% of respondents (over 7 million) have already done this and are now renting in the city, with the rising cost of living as a primary motivating factor.
The need to downsize has been made necessary due to surging mortgage rates as the average standard variable rate mortgage now stands at 7.67% causing house prices to witness their biggest drop in 14 years according to Nationwide. The average price of a home is now £260,828 as UK houses are more than twice the price of an apartment – the highest in 20 years – according to Zoopla.
The data from Cornerstone also reveals that 6 million (10%) Brits have expressed their intention to move back to urban centres within the next five years due to the convenience and proximity of amenities such as schools, transport links, and retail offerings.
This highlights a reversal of the abundance of people who decided to flee cities in search of more space and fresh air during the pandemic as Rightmove revealed in the summer of 2020 that enquiries from city residents about village homes rose by 126% compared to the year before.
For individuals seeking stability and ideal living environments to raise families, urban amenities have become a decisive factor in their decision-making process.
The allure of shorter commuting times and a wide array of recreational options makes city living an appealing prospect for those looking for a well-rounded lifestyle.
Compounding this shift, research from the Rural Services Network highlights that the cost of living crisis is hitting rural areas harder, with higher costs and lower earnings compared to their urban counterparts. Reduced access to transportation options is also affecting this shift – the Campaign for Better Transport revealed that an estimated 3,000 rural bus routes have been lost or reduced in a decade, causing rural households to spend an average of £114 per week on transport compared to £80 for urban households.
David Hannah, Chairman of Cornerstone Group International said, “In the wake of the COVID-19 pandemic, the ‘race for space’ saw a surge in the number of Britons leaving urban settings for the tranquillity and spaciousness of rural areas. But with mortgage rates having soared since, many are now finding they’re unable to afford these bigger and more costly homes.
“Serving as testament to this, our data shows that a staggering 7m people across the country have had to downsize and move back to renting in the city due to rising costs.
“While there’s an undeniable charm to rural living, the practicalities of urban life – from better job prospects to a myriad of entertainment options – also make them an enduring lure for many, especially in these uncertain times.”