Sam Bright and Sascha Lavin explore how the ‘Zoomtowns’ phenomenon is putting a burden on local property markets

London’s housing crisis is a well-documented feature of national life, with extortion now an accepted part of the capital’s property market.

In the year to March, asking rents in London increased by 14.3% – the largest annual increase anywhere in the country since records began. According to Rightmove, the average cost of renting in the capital is now £2,193 a month. This trend is tracked in other major cities, with Gráinne Gilmore from Zoopla saying that the firm has seen the “flooding of rental demand back into city centres”.

However, a simultaneous process has been occurring in the capital, in the form of relatively subdued growth in property purchasing prices. In the year to February 2022, for example, London experienced the slowest growth in purchasing prices of any English region – 8.1% – compared to 12.5% in the east and the southwest, and 12% in the wider south east.

Average London house prices still stand at some £530,000, exceeding the southeast by £150,000 and the southwest by £215,000, but this gap appears to be closing – triggered by the pandemic.

With home working normalised, many London property owners decided to liquidate their assets and break from the confines of the capital – buying larger homes, with more indoor and outdoor space, in less expensive areas of the country. While Manchester had a dwelling density of 20.3 per hectare in 2021, Kensington and Chelsea logged 73 dwellings per hectare, and Tower Hamlets had 65.4 per hectare.

As we have been brought into closer contact with the homes and communities in which we live, people have naturally sought to escape the crammed living quarters offered by the capital.

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However, this exodus from London – people previously living in the capital spent a record £54.9 billion on properties outside London in 2021 – has not seen the scattering of Londoners to far-flung areas of the country.

“Places absorbing in-migrants from cities seem to be sparsely populated areas within commuting distance from large employment centres, particularly London,” says Francisco Rowe, senior lecturer in Quantitative Human Geography at the University of Liverpool. “People leaving large cities tend to work in high skilled professional occupations which do not necessarily require face-to-face contact.”

However, as Rowe identifies, face-to-face contact has not been dispensed with entirely, even among highly-skilled occupations. Hybrid working is now the norm, with people splitting their time between the office and home and keeping them within the orbit of major cities – albeit allowing them to move further away from the city centre.

And so, while the pandemic has liberated workers to some extent – potentially aiding the regional redistribution of the economy, as identified by Gaby Hinsliff recently in the Guardian – it is also incubating a range of new problems for the satellite towns that feed big cities.


Feeder Towns

Primary among these problems is the inflation of local property prices, with London’s housing crisis now stretching beyond the confines of the city. From 2020 to 2021, house prices increased by 14% in England while earnings fell by 1% and, by 2021, full-time employees could expect to spend around 9.1 times their workplace-based annual earnings on purchasing a home – up from 7.9 in 2020.

These affordability issues are concentrated in the south of England – particularly in areas that flank London. The worst housing crises outside the capital – in terms of the ratio of house prices to annual earnings – are suffered by the Cotswolds, Chichester, Waverley, Tandridge, Epsom and Ewell, Elmbridge, Tunbridge Wells, Windsor and Maidenhead, St Albans, Hertsmere, Epping Forest, and Brentwood. All of these places are either in the east of England, the south east or the south west.

A number of these places – the Cotswolds, Chichester, Tunbridge Wells, Windsor and Maidenhead, and Brentwood – have only entered this leaderboard since 2018.

Of the local authorities that have experienced the largest increase in house prices in the year to February 2022, all are relatively small conurbations – small towns and rural districts – with low housing density compared to bigger cities. More than 60% of these areas are in the south of England and the biggest increases have been seen in North Devon (a 24.1% jump) and Lewes (20.7%) in the south east.

“The impacts on these areas are expected to be noticeable,” says Rowe. “In the short-term, migration to small towns or rural areas is likely to exert pressures on the housing market, causing rises in local house prices and greater demand for local services, such as transport and consumer products… In the long-term, if migration from cities to the same places continue, the pressures identified above are likely to result in gentrification displacing some of the less affluent communities.”

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Gentrification, the transformation of working-class areas by more affluent residents seeking cheaper properties, has been taking place in London for some time – and now looks set to be carried beyond the capital. Torbay, for example, which has seen house price increases of 16.4% over the last year, has concurrently experienced a 150% surge in people seeking temporary accommodation due to being made homeless since 2018.

COVID and changes to working habits has “led to worsening in Torbay’s housing crisis,” says local Liberal Democrat Councillor Swithin Long, “with many people being evicted from their rented homes so that their properties could be sold.”

According to the estate agency Hamptons, several areas experienced a marked increase in Londoners purchasing local properties in 2020, including Sevenoaks, Windsor and Maidenhead, Oxford, Rushmoor, and Eastbourne. In 2020, 62% of homes in Sevenoaks – a small town on the south-eastern periphery of the capital – were bought by a Londoner. Sevenoaks is just a 25-minute train journey from London Bridge on the southern bank of the Thames.

“The attractions of moving to the more remote parts of Kent become compelling if it means moving from London with a hefty profit from a house sale,” Professor Richard Scase of the University of Kent wrote last year. “But there is a price that has to be paid, and it is by local young people and their housing needs. The number of ‘affluent’ workers moving from London puts homeownership out of their reach. It means a life of rented accommodation or relocation from one town or community to another because of the availability of cheaper housing.”

He added that: “Perhaps importantly, house moves of this kind remove young couples with their children from their family support systems… often leading to stress and family breakdown, with the state having to pick up the costs and the pieces.”


An Uncertain Future

Cornwall knows these problems better than most. The county’s picturesque seaside towns have long been overrun by despondent city dwellers seeking a new life near the beach. In 2016, the average house price in picturesque St Ives was £324,000, reported the Guardian, 18 times the typical local salary.

“I’ve got people in my area who are living in cars because they’ve been booted out of their houses so that the landlords can put them on Airbnb over the summer,” says Kate Ewert, a Labour councillor for Rame and St Germans in east Cornwall. “It’s heart-breaking. These are people who just want to live in the community where they were born. They want to live close to their mum and their gran, but they’re being told they basically can’t live here.”

However, the Centre for Cities does caution that we don’t yet know the full impact of the pandemic. Its chief executive, Andrew Carter, told Byline Times that, “The recovery from the pandemic is still in its early stages so we cannot be certain that any developing trends will have a long-term impact on the housing market.”

This is echoed by Dr Frances Holliss, emeritus reader in Architecture at London Metropolitan University, who says that we’re in “completely unknown territory”. However, Dr Holliss added that “having researched this for 20 years”, she anticipates rises in property prices in satellite towns.

“This is bad for people in the lowest 40% of the income brackets, only 10% of whom are property owners,” she says. “And so it will make ownership of property less reachable for those people. But having said that, it will bring wealth into the community and with it will come employment.”

New research from the Centre for Economics and Business Research anticipates that the 10 fastest growing places in the country by 2023 will be in the south east and the east of England. This will create a lot of economic heat, potentially creating new job opportunities, but also invariably, it seems, inflaming local property markets.

This article was produced by the Byline Intelligence Team – a collaborative investigative project formed by Byline Times with The Citizens. If you would like to find out more about the Intelligence Team and how to fund its work, click on the button below.

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