Urban house prices soar as buyers return to cities after Covid

URBAN house prices are outstripping those in rural areas again as buyers return to cities after the pandemic, latest data suggests.

Figures from mortgage lender Halifax show property prices in major cities have grown 9.2 per cent on average since the beginning of the year.

By comparison, homes in suburban regions saw values increase 7.9 per cent. It signals an end to the property ‘race for space’ created during the Covid lockdowns, which saw buyers prioritise larger homes and more access to green areas.

The trend is being driven by an end to working from home as more employers pull staff back into the office, Halifax says.

In Leeds, prices have surged 13.6 per cent – the highest increase of any city this year. But homes in neighbouring North Yorkshire suburbs rose a far smaller 5.5 per cent.

In Manchester, the average property is now worth £228,806, having increased 11.5 per cent since the start of 2022. It’s a different story in nearby commuter town Bury, where prices have nudged only 1.3 per cent higher.

Andrew Asaam, of Halifax, said: ‘As daily life started to get back to normal for many, the opportunity to live in cities has become more attractive again, driving up demand.

‘There’s evidence of this in locations across the country, with property price inflation in the majority of cities outstripping increases in their surrounding areas.’

Typical mortgage rates have surpassed 6 per cent in the last month as lenders scrambled to make sense of September’s disastrous mini-Budget by former Chancellor Kwasi Kwarteng.

Average two and five-year fixed deals are now both the highest they have been since the 2008 global financial crisis.

Last week, signs emerged this was already having a knock- on effect on Britain’s red-hot housing market. Property price growth stalled to 0.9 per cent in the year to August, according to figures from the Office for National Statistics.

It still left house prices 13.6 per cent higher than in August 2021, adding £36,000 to the value of the average home. But that was slower than the 16 per cent rise seen in the year to July.

‘Signals an end to the race for space’