Housing demand trends across the UK

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The UK housing market has always been a topic of interest and speculation. Over the years various factors have influenced housing demand, including economic conditions, government policies and demographic shifts. Understanding the trends in housing demand is crucial for homeowners, property investors and policymakers alike. Come with us as we explore some of the key housing demand trends across the UK.

 Urbanisation and migration

Urbanisation continues to drive housing demand across the UK. In 2022, London remained the most sought-after city, with a population of over 9 million people. However, other major cities such as Manchester, Liverpool, Birmingham and Edinburgh also experienced significant growth with many migrating due to the cost of living.

Manchester in particular saw a 5% increase in population from 2021 to 2022, reaching over 2.9 million residents, with Liverpool gaining traction at an increase of 0.55% as renters search for more affordable housing.

Generation rent

The trend of "generation rent" has persisted, with many young people choosing to rent rather than buy. In 2022, the private rental sector accounted for 19% of households in England, a slight increase from the previous year.

The rental market remains competitive, with average rents inLondon reaching £1,600 per month for a one-bedroom apartment in comparison to cities such as Liverpool, which average around £900 per month.

Affordable housing

The demand for affordable housing continued to grow in 2022. The UK government made efforts to address this issue by introducing various initiatives such as The Affordable Homes Programme, aiming to deliver 180,000 affordable homes by 2026 with a particular focus on shared ownership schemes and social housing. In2022, over 44,000 affordable homes were delivered across the country.

Sustainability and energy efficiency

The importance of sustainability and energy efficiency in housing has become more prominent. In 2022, there was a significant increase in the installation of renewable energy systems in residential properties. The number of solar panel installations rose by 25%, with over 350,000 homes having solar panels by the end of the year.

Energy-efficient features such as double glazing and insulation also gained popularity, with an estimated 1.3 million households investing in these upgrades.

Remote working

The COVID-19 pandemic accelerated the trend of remote working, impacting housing demand. In 2022, the demand for properties with home offices surged. According to a survey conducted by Zoopla, 39% of homebuyers considered a dedicated workspace as an essential requirement. 

This shift in work culture also led to increased interest in properties circling major cities including those with coastal views and green spaces as people sought larger living spaces and a better work-life balance.

Demographic changes

Demographic changes continue to shape housing demand trends with the ageing population driving the demand for retirement homes and assisted living facilities, and the younger generation driving a demand for residential and student homes to rent.

According to the Office for National Statistics, the 2021 census saw the population of England and Wales grow by more than 3.5 million (6.5%) since the last census in 2011. With 29.1% of the population under 25 years old and 20.2% between 25 and 39, it’s apparent to see a youthful boost to the country's economy and pattern in housing demand.

Influenced by various factors, the housing market in the UK is subject to evolving trends. Urbanisation, generation rent, affordability, sustainability, remote working, and demographic changes all play a significant role in shaping housing demand. By staying informed about these trends and the latest statistics, stakeholders in the housing market can make more informed decisions. Whether you are planning to buy, rent, or invest in property, understanding the current and future housing demand trends will help you navigate the market effectively.

Contact a member of the IPG team today to discuss the market for 2023, and discover how you could capitalise on property demand in areas of regeneration.

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