Pandemic prompts house price surge in the North but more affordable homes are needed


10 March 2022

  • More than half (57%) of those living in the North expect house prices to continue to rise over the next three years as regional house prices increase by 17% since the start of the pandemic.
  • Increased demand has resulted in 60% of people in the North saying that they do not believe the housing market is currently helping people access affordable and quality homes.
  • When it comes to the checklist for new houses, larger gardens (41%), more living space (36%) and more efficient heating (31%) are the most sought-after features in the North.


According to research from Lloyds Banking Group, the pandemic has prompted a surge in house prices in the North, climbing by 17.3%since the since the pandemic. However, this increased demand and lack of affordable housing has resulted in nearly two thirds of those living in the North (60%) agreeing that the housing market is currently not helping people access affordable and quality homes in their region.

Top concerns amongst those in the North include; unaffordable house prices (60%), lack of social housing being built (47%) and high deposits (43%). Other considerations include a lack of rental properties (38%), too few houses being built (27%) and economic issues caused by the pandemic (26%).
 

Challenges for the industry

Across the North, both homeowners and renters agree that house prices are the biggest issue facing the market and are sceptical that the industry can deliver the affordable, quality homes needed to accommodate the increased demand in the area post-pandemic.

With the average house price now at almost £230,000, those in North believe issues around affordability are likely to get worse with more than half (57%) believing house prices will continue to spike over the next three years.

Beyond affordability, many respondents suggested that new homes in their local area aren’t being built in places where people want to live (34%) – with nearly half of those in the North (45%) frustrated that new homes aren’t meeting the needs of the local area.

Emily Cox, Lloyds Banking Group’s Ambassador for the North, said: “House prices and transaction volumes, even among first time-buyers, have grown significantly during the pandemic. However, this research also shows that many people in the North consider the continued strength of prices as the biggest factor preventing people from accessing quality and affordable homes.

“At the same time the pandemic is reshaping what we want from our homes, but many people in the North feel that currently where, and how, homes are being built is not meeting the needs of their local communities.

“Understanding these local trends, will be vitally important in ensuring the homes being built keep pace with the changing needs of individuals and local communities. That’s why, as part of our commitment to help Britain prosper, we are working across the industry to collectively work-out how we deliver the high-quality, sustainable and affordable homes that the North needs.”
 

Meeting local needs

Over the last year, there has been increased interest in the region as homeworking buyers and renters look to spend lockdown savings in more rural commuter areas, with many transactions focused on living in an attractive area (47%), good transport links (45%) and living near family and friends (44%).
 

A changing picture of home

However, when it comes to our homes themselves, a large garden and more space looks set to be one of the most important factors driving buying decisions in the North over the next few years. The garden was deemed the most important feature; with nearly half (41%) stating they would prioritise that first, followed by more living space (36%) and more efficient heating (31%). In fact, just over a third of Northerners said they would pay more than they would otherwise for a home with a garden (35%) and off-street parking (32%).

John Barnes, CEO of award-winning housebuilder Duchy Homes, said: “Duchy Homes started out as a premium housebuilder focused on small, exclusive developments of large 5-bedroom homes. In more recent years, through our partnership with the Housing Growth Partnership, we have been able to purchase much larger sites and build in greater volumes.

“This shift in direction has meant we are now able to provide more 2-bed, 3-bed and 4-bed homes to the market, without losing our focus on quality, which has opened up our brand to a much wider audience of homebuyers. We’ve seen increased demand for our new homes over the last 18 months and are continuing to purchase more land and secure planning permission for large sites across the North of England, including our upcoming development of 163 plots at Elwick, Hartlepool.”