The Covid city exodus: Reality, reversal or urban myth?


Graham Emmett, co-founder of Atelier

The start of a new calendar year naturally leads to forecasts about what might be in store for our housing market.

After a tumultuous 2021, there is much to ponder: how high might interest rates go? Where are property prices headed after a record year? How might further Covid waves affect economic activity?

UK house prices soared by a tenth in 2021, according to the Halifax, with the average home ‘earning’ more than many Britons, with a £24,500 increase in value over the year.

Behind the headline figures, much has been made of the gulf between price rises in London and the regions. The capital’s relative sluggishness, and the widespread shift to remote working, have led some excitable commentators to predict that an exodus of professional workers from urban to rural areas will ultimately squeeze the life out of our most vibrant cities.

Our assessment at Atelier, is that these would-be obituary writers are jumping the gun, a view supported by new analysis by our Consultant Economist, Bob Pannell.

Bob’s latest report suggests that the ‘race for space’ in more rural locations is already losing steam, and we are now seeing the first patches of blue sky for the capital’s sales and rental markets. In many ways, this reversal makes a lot of sense.

Even with the rise of people working from home, the economic benefits of agglomeration remain strong, and replicating them remotely will never be an easy task.

Of course, it’s impossible to know with certainty what lies around the corner, but we anticipate the capital and other major metropolitan centres will strengthen throughout 2022 and beyond, subject to the usual caveats surrounding fresh variants of Covid.

If there is one thing we have learned from our economic history, it is that our cities are always evolving. And while our capital has suffered many setbacks in the past, it has always rebounded more strongly than before.

In that respect at least, we expect the future to be no different.

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