Demand for more space is driving house prices higher in the suburbs as the pandemic changes the lifestyles of city homeowners.
Homeowners were forced to work from home during the pandemic driving demand for larger properties in the suburbs with house prices rising 10.8% compared to cities higher by 8.9%, says Halifax.
More indoor and outdoor space is a high priority for home movers and data from March 2020 during the first lockdown to June 2021 when the government’s stamp duty holiday started to end, confirms a switch in buying behaviour from the city to the suburbs.
As fewer days are spent in the office, homeowners have changed their work-life priorities and taken advantage of the higher stamp duty holiday threshold of £500,000 to buy a family home.
House prices gains in suburbs
The suburbs have seen double digit gains in house prices over the last year with the biggest rise in the surrounding areas of Plymouth on England’s southwest coast where city growth was only 5.8%.
In contrast growth in the suburbs around Plymouth averaged 16.1% rise and the area of South Hams rising 26.3% driven by demand in Salcombe, the most expensive seaside town in Britain.
This table from Halifax shows the highest growth in house prices for the suburbs surrounding Britain’s cities from March 2020 to June 2021.
| UK city | City growth | Suburb growth |
|---|---|---|
| Plymouth | 5.8% | 16.1% |
| Leeds | 11.0% | 13.8% |
| Manchester | 11.1% | 13.4% |
| Norwich | 8.4% | 13.0% |
| Sheffield | 14.1% | 12.8% |
| Bristol | 9.7% | 12.7% |
| Cardiff | 11.4% | 12.7% |
| Edinburgh | 8.5% | 12.6% |
| Leicester | 6.5% | 12.1% |
| Nottingham | 7.4% | 12.1% |
City prices in Leeds are up strongly at 11.0% year-on-year with prices in the suburbs even higher at 13.8% and the area of Calderdale with exceptional growth during the pandemic rising 26.7%.
Wales has experienced strong house price growth with Cardiff up 11.4%, the surrounding areas higher by 12.7% and the area of Rhondda Cynon Taf up the most at 27.3% for the year.
The rising house prices in these areas can benefit older homeowners as the equity release buyer can access cash using a lifetime mortgage and use this for anything, such as home and garden improvements.
For first time buyers the higher prices means they would need a larger mortgage or find a bigger deposit to buy in the suburbs although the starting prices are typically lower than for the city.
See how much your monthly mortgage payments would be when buying a property in the suburbs at this link:
Mortgage cost calculator with instant results and figures for your home in the suburbs.
Some cities outperforming the suburbs
There are some cities that have outperformed the surrounding areas such as Liverpool with house prices up 12.5% over the year averaging £163,049 compared to the suburbs rising only 9.5%.
The Wirral was the best performing area near to Liverpool rising 16.6% and the worst was Knowsley up by 2.2% year-on-year.
If your property price has increased, the remortgage buyer with 40% equity can benefit from low interest rates under 1% and release capital to add more space such as an extension or loft conversion.
Newcastle experienced property prices rising 6.5% and outperformed the surrounding area averaging 4.0% higher with the area of Gateshead rising the most at 14.0% and North Tyneside was down -5.0%.
With less incentive to live in a city close to work, many people are looking further afield to find value given they will work from home more and still need more indoor and outdoor space.
What are your next steps?
Speak to our LCM mortgage advisers if you move to a larger property with more space and want the best mortgage deal. Learn more by using the property value tracker chart and equity release calculator.
Start your free quote when moving home and we can look for the best mortgage and lowest interest rates at this link:
Free mortgage quote with competitive mortgage rates for your new home.
If you are releasing equity from your home to maintain your lifestyle or buy a new car, we can recommend lifetime mortgages so begin your equity release quote for the leading provider offers.
