Pandemic restrictions forced U.K. home buyers to choose detached homes over flats
Due to the strict social distancing rules in place during the ongoing Covid-19 pandemic and the severe movement restrictions that prevented people from visiting their workplaces, demand for detached houses grew and even surpassed the need for flats in the United Kingdom.
The trend was observed across the U.K., though it was more pronounced in certain locations such as Birmingham, Liverpool, Leeds, Manchester and Bristol,data from REalyse's U.K. real estate dashboard reveals.
The following graph created using REalyse's data depicts the sales transactions in the above-mentioned locations across various types of properties — flats, terraced, semi-detached and detached.
CHART1: Sale transactions across various types of houses in Birmingham, Liverpool, Leeds,Manchester and Bristol
As shown in the chart, sales transactions across all types of homes crashed when the pandemic started in 2020. In 2021,despite another wave of COVID-19 hitting the U.K., as the restrictions were relatively milder, sale transactions started to recover. In fact, given the pent-up demand, the number of home sales recorded higher levels than usual in2021.
However, as Chart 1 shows, while the demand recovered across terraced, semi-detached and detached homes, the number of sales involving flats did not recover to its usual levels.
For instance, in the pre-pandemic period, on average, about 2,500 sale transactions involving terraced and semi-detached homes were each recorded in a month across the chosen locations. It dipped to around 2,000 transactions in 2020 and recovered back to 2,800 in 2021 due to pent-up demand.
Similarly, the number of sales transactions involving detached homes dipped from the usual levels of 1,200 transactions per month in the pre-pandemic period to around 1,000 in 2020. But jumped to around 1,400 transactions in 2021.
However, the number of transactions involving flats, which reduced to around 1,200 during the pandemic from around 1,800 in the pre-pandemic period, never recovered much thereafter. In 2021, while transactions recovered across all the other types, flat sales remained muted at around the 1,300 mark.
If the chart 1 data is limited to the Birmingham area, the trend becomes even sharper.
CHART1A: Sale transactions across various types of houses in Birmingham
As can be seen from chart 1A, the demand for flats in Birmingham declined during the pandemic and never recovered even as the demand for detached houses surged.
Studying the patterns across different home types shows that U.K. home buyers preferred detached homes more than flats. Tounderstand the possible reasons behind the shift in preferences of the home buyers, Covid-19 cases data in the regions and Google mobility data have to be analysed.
Chart2: The number of Covid-19 cases in the United Kingdom across time
Chart 3: Shows the Google mobility data for the region
The chart depicts the change in visits to work places and transit stations compared to the pre-pandemic levels. Figures above zero indicate that the visits/stay increased and figures below zero indicate they decreased compared to the pre-pandemic levels.
As can be observed from charts 2 and 3, during the first Covid-19 wave, severe movement restrictions forced the U.K. work force to stay at home and work. In the subsequent waves, while cases multiplied, the restrictions eased. However, workplace visits have not yet reached pre-pandemic levels as can be seen from chart 3.
This seems to be the primary reason behind the U.K.home buyer's change of choices. A lot of them shifted to detached homes with more space and privacy as the pandemic forced them to stay indoors and work from home. However as pandemic restrictions have eased and mobility improves in future, the trend may change again.