The Cotswolds was one of the most in-demand areas once the property market reopened for business in early summer 2020.
Like many other people it was the move to working from home which offered Emily Payne and Richard Springer the opportunity to get out of London. The couple, who have two children, aged six and nine, picked the town of Stroud for its great schools and green space. But the charms of a town nicknamed “Notting Hill with wellies” had not gone unnoticed by other London leavers.
“It was mad,” said Ms Payne, 41, a journalist and copywriter. “We would see a house online and we would call the next day and it would already be gone. Everyone was looking at this stage, and we would see something we really loved, and it would immediately be gone.”
The couple made two offers before hitting the jackpot – although the three-bedroom bungalow they bought was far from the prize they had imagined. “We ended up with a house which is quite ugly,” said Ms Payne. “It is a project.”
According to research by estate agency Savills using TwentyCi data, Stroud is one of the top 10 locations where the market was the most frenetic in 2021, but where demand has since evaporated quickest. Between September 2019 and September 2021 the number of sales in Stroud increased by 25.5pc. Over the year to September 2022 the figure fell back to 1.8pc above 2019 levels – still ahead, but only just.
And, as storm clouds gather above the market – with soaring mortgage rates and less disposable income – buyers who rushed to snap up properties in popular coastal and country areas are waiting anxiously to see what will happen to the values of the homes they bought in haste during the pandemic.
History suggests that when demand starts to drop, and market activity slackens, the next step in the property market cycle is for price growth to slow down or stop. But Frances McDonald, of Savills, argued that many post-pandemic boom locations were underpriced pre-pandemic.
“Areas that had not seen strong growth since the global financial crisis are more insulated against some of the headwinds coming our way next year, because compared to 2007-08 they are still under performing,” she said. “If you put it into the context of the past 10 to 15 years, we are still not talking about those markets reaching the same prices as cities.”
Ms Payne and Mr Springer, 40, a videographer, sold their three-bedroom house in Brockley, south-east London, for £600,000. They had bought the house on a shared ownership basis, so their stake was worth £180,000. They paid £330,000 for their Stroud home in May 2021 and are now undertaking a circa £100,000 renovation.
Ms Payne takes a philosophical view of Stroud’s recent change in fortunes. “We bought our house as a place for us to live more comfortably than in London, not to make money, and on that basis it has worked for us,” she said.
‘My anxiety levels are sky-high at the moment’
Most of the locations where the number of sales have tumbled since the post-pandemic high are coastal or within Areas of Outstanding Natural Beauty. They include Staffordshire Moorlands, set on the south-west fringes of the Peak District.
Sales volumes jumped by 26pc between September 2019 and September 2021 but this year they fell back to 1.6pc below 2019 levels.
The same patterns can be observed in Teignbridge and Torbay on the Devon coast, and Copeland, the district which combines the western section of the Lake District with a slice of north-west England coastline.
Urban locations have not completely escaped the post-pandemic backslide. Havering, on the fringes of London and Essex, and a popular spot for buyers after value for money, and York, where buyers rushed to exchange small flats for houses, have also seen market activity rise sharply and drop off just as fast.
For Natalie Goodwin, of Daniel & Hulme estate agency in the market town of Leek, in Staffordshire Moorlands, the past couple of years have been hectic as people living in nearby cities like Manchester, as well as from as far afield as London, fell for its combination of lovely countryside and its mix of well-priced homes.
Period family-size homes were in particular demand. “We were getting sealed bids, people were gazumping, it was mad,” she said. “And there was a domino effect because as soon as one person sold for one price, their neighbours would want to sell too.”
Ms Goodwin agreed that much of the heat has gone out of the market this year. Pandemic-driven relocators have dried up, she said, and buyers are less motivated.
Laura Smith and her partner Gary Barratt had loved the two-bedroom Victorian house in Hull which they shared with their daughter Madeleine, now six, before the pandemic. With lockdown restrictions in full swing they began to rethink their lives.
“We wanted to live somewhere more rural, and closer to the beach,” said Laura.
They started looking at homes around the town of Beverley, in the East Riding of Yorkshire. “It was very competitive,” said Ms Smith. “I think it is just that perfect sort of place, with the countryside two minutes away, the coast 15 minutes away, and the town centre.”
Eventually Laura, 34, and Gary, 32, who run copywriting business Ella St Communications, compromised in order to make a move. They sold their Hull house for £208,000 – having bought it for £123,000 – and paid £255,000 for a run-down three-bedroom 1950s house in a village just outside the town which they are now renovating.
“We bought at a high, but we also sold at a high, and without that we wouldn’t have been able to move into this area,” she said.
Things are not quite so straightforward for Emma and Clare Willis who moved from a two-bedroom flat in south-west London, to a house in York, on the first day of the long winter lockdown of 2020/21. The market was on fire when Emma, 38, and Clare, 41, started house hunting in York, so when they found a three-bedroom Victorian terrace they went straight in at the asking price of £385,000, having sold their flat for £430,000.
In many ways the moves has been a great success. Their two children are settled and after giving up high-powered jobs, working life has calmed down. Clare is now a community worker while Emma has set up her own training and coaching business, Art of Production.
Financially, however, Emma is worried. With living costs and interest rates going up, she is concerned about what will happen when their mortgage deal ends next year. Plans to renovate the house have been put on hold, and moving to a cheaper area is being considered, although a sharp decline in sale volumes suggests they may struggle to turn a profit once moving costs have been taken into account.
“My anxiety levels are sky- high at the moment,” said Emma.