Return to office sparks London housing market surge

The return to the office and end of Covid restrictions is causing a surge in demand for London properties. Since the start of this year, there has been a sharp increase in workplace activity across London, as prospective new buyers and renters gear up for a move.

According to Google mobility data, workplace activity in the City of London has exceeded pre-pandemic levels already in 2022. With many workers now back in the office, at least part-time, this will incentivise many commuters to return to the London commuter belt, a fillip for both the rental and buying market.

Now that the worst of the pandemic is behind us, inner London and its surrounding areas are benefitting from increased demand. This has seen London receive the biggest uplift in buyer enquiries in the UK last month (rising 24%), according to Rightmove. The capital also saw its highest rate of annual price growth, with prices up 11% in January, compared to the same month in 2021.  

The price rises can mainly be attributed to a decline in new homes coming to market. This is due primarily to people delaying plans to move during lockdown, as well as a slowdown in new build homes. This has meant current levels of demand are far exceeding the supply of homes on the market. 

Another factor behind the jump in demand is the increase in number of mortgage products on the market, with more lenders offering loans of five times the borrower’s income. Despite the Bank of England’s recent interest rates increase, the cost of borrowing remains fundamentally low. The Government’s mortgage guarantee scheme is also helping first-time buyers get on the property ladder with just a 5% deposit.

Stephen Ludlow, Chairman at ludlowthompson said: “Demand for properties in the capital has surged and could rise even higher now that the final Covid-19 restrictions are coming to an end.”

“Many people understandably adopted a ‘wait-and-see’ approach during the pandemic. However, now that there is greater certainty and more people are coming into the city for work, professionals are on the lookout for properties that tick all the boxes, namely good transport links for commuting, as well as space for a home office set-up.”

“This is good news for London homeowners either seeking to sell or to rent out their properties.”

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