Space race: UK buyers seek bigger homes, push up prices

A boom in the U.K. housing market gathered pace this month as Britons’ pandemic-driven desire for more living space and a tax break on purchases pushed asking prices up by the most in four years.

Advertised prices for homes gained 5% from a year earlier, the most since September 2016, property website Rightmove said on Monday. The largest increases were seen in regions outside of London such as Yorkshire, the Midlands and Scotland. Prices rose 0.2% from August to an average of 319,996 pounds ($415,000).

With the coronavirus forcing people to spend more time at home, Britons are craving more outside space, bedrooms and distance from city centers.

“There’s a new urgency for extra space to be able to work from home,” said Tim Bannister, a director at Rightmove. “At the start of the year, a fourth bedroom was very much a luxury for buyers trading up, but it’s now emerging as a must have.”

Still, while the experience of lockdown is fueling a boom in the property market for now, rising unemployment and the expiration of a tax break on home sales will weigh on prices in the next few months.

The exodus is slowing transactions as agents struggle to keep up. Rightmove estimates that about 40% more sales are going through compared to this time last year. Sales of three and four-bedroom homes have more than doubled.

By contrast, transactions in central London are down 14% from a year ago.