Lockdown could have sparked a ‘London exodus’ with an increase in people searching for bigger homes outside of the capital and the end of the trend for ‘micro-living’, according to new research from SevenCapital.
A huge proportion of the UK population has been forced to spend the majority of their time at home over a prolonged period. For many workers, this has meant a complete shift to working remotely from home – living, working and spending down-time in the same space. For families, it’s meant perhaps little or no ‘me-time’ away from other members of the family or space to escape or work peacefully out of the way. For many, the only possible solution to these challenges is a larger space or extra rooms.
Those perhaps most affected by being forced to stay within the realms of their own four walls, however, are likely to be those living in ‘micro-flats’ or ‘micro-homes’. Generally found in London, micro-flats can be as little as just 150 sq ft, or smaller. Arguably manageable if your pre-pandemic lifestyle meant home was mainly just a place to rest your head, but when your small space has to play host to working, exercising, eating, socialising (virtually), relaxing and sleeping, it’s not ideal.
Furthermore, with the 'new normal' potentially meaning working from home for the foreseeable and going out to socialise not what it used to be, SevenCapital says that central London location isn’t as important as before.
It has subsequently seen reports over recent months from multiple estate agencies in the South East announcing a surge in Londoners searching and enquiring into larger, higher-end properties outside London.
So, with a central London location a less important factor and space now taking precedence, buyers and renters are opened up to multiple opportunities outside the capital, where the commuter belt can offer easy access but a much more spacious, better quality home for a far lower premium.
Upcoming areas such as Slough and Bracknell, amongst many others, which have, or are undergoing significant regeneration have already been increasing in popularity over recent years. Developers are building new homes and apartments designed to match the quality and style of an upmarket London residence, but for a more affordable price tag.
At one end of the scale – although by central London standards still relatively 'affordable' – the location conscious renter could rent their own studio apartment near prime areas such as Marble Arch at circa £1650 pcm for 333 square feet. However, if location were to slide down the priorities list in favour of size of apartment and outdoor space, that small studio space could be swapped for a contemporary and spacious new two-bedroom apartment with balcony and parking in a private gated development, such as SevenCapital’s The Metalworks, less than 18 minutes train ride away in Slough.
What does this mean for landlords?
This is all a serious consideration for landlords and property investors too. This trend of Londoners leaving the capital in search of a bigger, higher quality space and better quality of life isn’t new, it has in fact already been accelerating gradually over recent years – it’s just been boosted by the UK’s lockdown. Those who already identified the emerging markets outside London are already reaping the benefits of price and rental growth - Slough’s house prices have nearly doubled since 2009 on the back of Crossrail, with significant regeneration and investment continuing to transform and attract new people to the area and push up prices.
Neither does this trend look to slow down anytime soon either, with property prices and rental markets in the South East – home of Bracknell – predicted to grow 17% and 14% respectively by 2024 according to Knight Frank’s UK Residential Market Forecast. The benefit of these areas is they come at a smaller premium for investors as well as renters, but often with higher achievable rental yields for the investor, making it a win-win situation for both parties.
So will this mean the end of micro-living? In reality probably not, as there will likely always be a market for people who are happy to compromise and live very minimally. However, whilst people continue to place more emphasis on more personal space and access to outdoor areas or premium amenities, micro living is certainly set to take a back seat.