How the Coronavirus pandemic has changed UK homebuyers' purchase wish-lists

The MFS survey was undertaken by 2,000 adults in the UK who were in the process of buying, or were looking to buy, a residential property.

The top 3 property features for our UK Homebuyer Wishlist 2021, compared to their 2019 position:

1.       Garden and/ or outdoor space (Up 1)

2.       Square footage of the property (Down 1)

3.       Broadband and mobile connectivity (Up 5)

Moving outside

Concurred by 92% of the homeowners and buyers, having a garden - or some form of outdoor space - was deemed the single most important factor in the current property market. This replaced the square footage of the property, which topped the 2019 Wishlist. Building developers and property investors would be wise to take this into account in upcoming housing projects where possible, to get the highest prices for their properties. After spending three lockdowns indoors, it is no real surprise that having an outdoor area has become increasingly important to homeowners. Properties with gardens or in walking distance to open green spaces are becoming valuable UK assets.

Whilst the stamp duty land tax reduction has created a prosperous and buoyant property climate, the increase in interest has caused somewhat of a property shortage. MFS’ survey highlights the impact this shortage holds for the first-time buyer community in particular. When asked whether the buyers felt there was a shortage of their ideal property on the market, 70% of those who said yes were aged between 18-34. Zoopla’s latest data shows 3-bed semi-detached properties as the most in demand, with the top 3 locations having seen double the buyer demand: Braintree surged by 107% (Essex), Monmouthshire 100% (Wales) and Knowsley 96% (Merseyside). Of all their top 20 locations to witness interest in this specific home-style, only one area (Stockton-on-Tees) witnessed a 4% rise in supply, whereas the 19 others struggle for supply.

The importance of a garden also correlates with the rising interest in the potential to convert or extend a property, as 76% within the survey cited this as an important feature when buying in 2021. This finding highlights the intense thirst for increased floorspace, ignited by the stamp duty land tax (SDLT) holiday, as this has meant buyers can afford a slightly more expensive property than they could before. This higher interest in the potential to convert (+6 in comparison to 2019) presents an impression that homebuyers may be less inclined to move within the upcoming decade, preferring instead to improve their current property.

Size matters

Previously, the most important aspect when purchasing a new home was the square footage of the property. This still remained high on the new homebuyer list, with 89% voting it one of the most important features. Despite its second placing, the pandemic has supercharged the desire for a larger property. Fuelled by both the introduction of a flexible working-from-home option by thousands of UK employers, and the stamp duty land tax reduction that has been in play since July 2020 – homebuyers want to make the most of their extra money to gain extra space. Buyers rushed to take full advantage of the stamp duty threshold increase and the potential to put an additional £15,000 in their new homes to do so.

The need for space has born witness to the dramatic fall of a once highly important element for commuters: transport links. The pandemic saw many city lovers abandon the built-up city for the fresh air and sparsely populated countryside towns, in attempt to avoid the Coronavirus pandemic. As such, the importance of transport links surrounding the property and its distance to the nearest town or city saw a sharp fall, receiving only 67% of the votes for importance; down 16% from the 2019 survey. Combined with a large introduction of working-from-home options by employers, there has been a dramatic lack of emphasis on the importance of travel. Now, restrictions are fully lifted and yet many employers are still offering a work from home option. Is it therefore surprising that proximity to transport links have dropped 7 places on the Homebuyer Wishlist?

Staying connected

Previously eighth, 88% of homebuyers cited broadband and internet connectivity an important factor. This notable increase should, again, highlight the change in homebuyer perspective since the Coronavirus pandemic. The worldwide crisis has witnessed a large portion of employees having to work from home, even for a short period of time since the first UK lockdown in March 2020. This raises infrastructure questions, and we will need to see whether poor connections will push employees back to the office for stability.

We should take the time to reflect on, and learn from, how the pandemic has dramatically decreased the worth of several factors in the eyes of the UK homebuyers. Despite the changes we have seen, life in the UK is seemingly slipping somewhat back into its pre-pandemic lifestyle – so will the next Homebuyer Wishlist look more like it did in 2019?

"Remote working and social distancing mean the majority of Britons now spend much more time in their own homes, while access to outdoor space for both exercise and socialising has become far more important. Our new report highlights just how quickly the market has evolved. There are notably different demands among homebuyers, with a property’s garden and broadband connectivity becoming ever-more important factors."

Paresh Raja – CEO of MFS

Regional impacts of coronavirus

Covid-19 has dramatically altered our everyday life. From the way we travel, the way we work, to the way we interact. Since the beginning of March 2020, both consumers and businesses were forced to find alternative ways to function. MFS’ research, as discussed above, clearly stresses how the previous 12 months have personally impacted property investors and homeowners views on property. But what are the regional reactions to the past year’s antics?

Despite the regional developments in house values that has been observed in the 12 months leading up to March 2021, (Yorkshire and the Humber increased by 14%, Northeast by 13.7% and North West by 12.8%) only 34% of regions agreed that the pandemic changed their perspective on what you want and need from the property they current live in.

Conversely, this increased dramatically when taking in some regions individually. London was 10% higher (44%). Of those based in London, 58% of the homebuyers felt the pandemic had opened their eyes to the need for a larger property. During the initial lockdown, the capital saw many Londoners move to the countryside, boosting the £5-million countryside property sales. Renters who could afford to buy due to the SDLT holiday also looked to escape the city by moving to neighbouring commuter towns, looking to get the most for their money.

But it is not just London that has seen a thirst for space, 46% of people across the whole of the UK regions agreed that they’d like to live in a property with more space. London had the highest figure of 58%, swiftly followed by the West Midlands and Wales (55%) and the Southeast (51%).

One of the overriding messages that can be taken away from the MFS Homebuyer Wishlist research is that at the present, the UK’s property market is too competitive. Almost half of those surveyed shared this view (47%). In the Northeast, East of England, London, and Wales, results were 52%+ regarding the intense competition for assets. It also highly resonated within those aged between 18 and 34 (64%).

Furthermore, 40% of those surveyed believe there is a shortage of the type of property that they would ideally like to buy. With the property market being flooded with buyers, a strong imbalance between supply and demand became increasingly problematic in the lead-up to the stamp duty holiday deadline.

Finally

The housing crisis has been a longstanding issue, and one that the UK Government and construction sector will need to collaborate on closely to address in the years ahead.

Whilst mortgage approvals have started to gently decline following the end of the stamp duty holiday, they have remained firmly above pre-February 2020 levels.

This strongly suggests that demand for property will continue to hold steady into the autumn months, with some industry experts predicting a buoyant housing market into summer 2022.

Despite conjecture from property investors and some lenders initially expecting a market slowdown following the SDLT holiday, the continuing demand for property, paired with the data collected by MFS’ survey, shows that fears of a post-pandemic slowdown are unlikely to materialise.