By Richard Cook, group development director at Clarion Housing Group
The UK has had to navigate a tumultuous period of uncertainty across the past few years. Brexit, general elections, and the Covid-19 pandemic have all had their turn at influencing and accelerating changes across both the business and consumer landscape.
However, throughout this period the housing market has remained robust and last year saw house prices rise by 13.4 per cent1, the fastest annual growth rate since 2004.
Yet while the overall trend for house prices has been positive, the pandemic had an undeniable effect on demand for city-centre living. A spike in remote working, as well as hospitality and leisure businesses closing their doors, took some of the shine out of city living.
Perhaps unsurprisingly, many people shifted their focus to a new way of living because of the pandemic. This resulted in a 126 per centi rise in enquiries from city residents for rural housing in June and July of 2020 alone. In 2020, Londoners bought 73,950 homes outside of the capital and the first six months of 2021 saw a further 61,830 buy homes elsewhere, according to estate agent Hamptons.ii To many people, larger properties with abundant green spaces in rural and suburban locations looked as though they were better suited to the challenges of living and working through a pandemic.
Fast forward to today, however, and the buzz of city-life is calling to renters and buyers once again. There are even reports now emerging of people who regret moving out into more rural areas, where amenities are not as readily available and commutes to the office, now government work from home guidance has ended, may be longeriii.
Demand for urban living is seeing a resurgence. In Manchester alone, there was a 36 per cent increase in demand for rental property within the city towards the end of 2021iv. In its latest residential forecast for 2022-2026, JLL predicts that economic growth in the city of 16.4 per cent over the next five years will further fuel the market, with prices increasing by 25.8 per cent and the average rent increasing 15.4 per cent by 2026. This is far above the forecasted national average of 21.7 per cent and 12.6 per cent growth for house prices and rents respectivelyv.
For property investors, these upbeat forecasts are putting city centre dwellings back on the map as an attractive investment proposition. However, it’s important for investors looking at urban living opportunities to consider how the pandemic has shaped nature of demand among would-be renters.
Changing expectations for city living
While demand shows that many people do want to return to the city, that doesn’t mean that many of the things people valued in homes during the pandemic are no longer sought after. If anything, you could say that people have become more discerning and demanding.
We are now seeing increased demand for green spaces, open communal areas, and wellbeing hubs that create vertical communities within a city landscape. With an element of home working here to stay as many businesses embrace hybrid working practices, energy consumption prices set to rise and conscious consumerism now a major factor in people’s purchasing decisions, demand for more sustainable, low carbon dwellings is on the rise.
These new realities have shaped Latimer’s new High Definition development. Sitting within Media City in Salford, the HD development delivers a holistic approach to work/life design. Location wise, it is ideally suited people looking to return to city living, combining the vibrancy of living in one of the most innovative international creative hubs, with the relaxing element of quayside living. And over the next decade, a projected £1 billion will be invested into Media City. This is set to create one million sq ft of commercial space and five acres of high-quality public realm while attracting 7,500 more people to come and live, work and study there.
For those who already work in one of the 1.3 million jobs in Manchester, Media City provides access to some of the best transport links into the city centre, allowing for an easy and more sustainable commute. And with water sports, open swimming and quayside yoga, as well as a gym, bars, restaurants and spas, it isn’t just work opportunities that bring people to Media City.
High Definition itself will amplify the benefits of its surroundings, with natural design elements, floor-to-ceiling windows, on-site concierge and a range of communal areas including co-working spaces, a podium terrace, and a multi-function media room.
At Latimer, we believe that by offering these amenities, High Definition will act as an exemplar of what the future of aspirational city living looks like. We strongly believe it is this kind of high-quality development that is essential to meeting the demands of would-be renters as we emerge from the pandemic.
For property investors, it is an example of the kind of high-quality development that could be a fantastic long-term investment too.
