Buyers drawn to affordable towns as move to the country trend fades

Created: 19 Jan 2023

Interest rate rises, affecting mortgage refinancers most potently, as well as high levels of inflation, have given rise to a cost of living crisis across Britain. This has led home buyers to seek out affordable towns, like Luton, in favour of countryside homes in a reversal of a prominent pandemic trend.

The trend of moving to rural and coastal areas is fading as affordable towns become a draw for potential buyers, according to Zoopla. Higher mortgage rates have created an affordability challenge for potential buyers, with UK mortgage lenders Halifax and Nationwide predicting UK house price falls next year of 8 per cent and 5 per cent respectively. Zoopla contends the smallest falls will be “affordable” urban areas, and among flats.

The UK housing market saw a decline in December, according to Halifax’s monthly index, with real estate values decreasing by 1.5 per cent, a fourth consecutive month of decline. The annual rate of house price growth also more than halved to 2 per cent in December, from 4.6 per cent in November. This is the lowest annual growth rate recorded since October 2019, when a 1.1 per cent increase was recorded.

Experts attribute the slowdown in the housing market to the Bank of England’s nine interest rate hikes in the past year and the country’s current long recession. The cost of living crisis has also affected mortgage payers who have had to refinance their loans, with many seeing their annual bills increase by more than £3,000 a year.

The construction sector has also been impacted, with data showing a contraction in December. Orders for new homes and plans for civil engineering and commercial office building projects have also been put on hold.

Affordable towns like Luton are thriving, and well-positioned to capitalise on this new trend with strong economies, good transport links, and a range of amenities that make them attractive destinations for both residents and property investors.

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.

https://www.bbc.com/news/business-64052031

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