Demand for 2-Bed Apartments Set to Boom Following Lockdown
Following easing lockdown restrictions, which saw many markets slow to a halt, we’re already seeing new buyers and tenants return to the property market in search of 2-bed apartments.
With this new wave of eager enquiries, there’s two vital signposts for investors: the arrival of a ‘mini-boom’ driven by pent-up demand and a shift in the way that people are thinking about their homes.
What you might not know is that both these signposts point to a rising demand for a specific property type – larger, more spacious two-bedroom and three-bedroom apartments.
When you think about it, the idea of more tenants realising they want (or need) more space is understandable. Many people have been spending a lot more time in the house – whether they’re in lockdown or switching to working-from-home.
This has created a need for more room to entertain guests, exercise or even just spend a few quiet moments – a place to relax when all of the family are home.
Likewise, many of the people transitioning to a work-from-home culture are realising that they either want a dedicated workspace or need the extra room to accommodate more than one person working.
As you’d imagine, these reasons are a major contributor to why we’re seeing a ‘mini-boom’ for larger spec apartments. At the same time, they also explain why we’re seeing increasing demand for homes with outdoor areas such as a private garden or balcony.
Now there’s nothing relatively new about this – people have always enjoyed the idea of a balcony for example – but what is interesting is that while these features are growing in popularity, the demand for ‘vanity features’ such as external appearance, kitchen islands and other once-popular amenities is falling.
According to Andy Shepherd, Chief Executive of Dexters – a London-based estate agent: “The shifts in the top ten ‘must-have’ features show that suddenly people are needing more space and not just for working from home. In our transformed Covid-19 world, life has become more home-based and this will no doubt become the norm for some while to come, from eating and socialising to gardening and exercising.”
Bigger and Better
For tenants, this need for space has obviously translated to a huge rise in enquiries for 2-bed apartments and 3-bed apartments. Larger apartments are at the top of wish lists according to Rightmove – nearly 49% of renters in a recent survey say that lockdown has increased their desire for a bigger home.
Similarly, a report from the Royal Institute of Chartered Surveyors has found that 81% of property professionals believe that properties with either gardens or balconies will command more interest from the wider market, especially in competitive high-density urban areas where amenities are nearby.
Fortunately, despite a change in working culture, the same report doesn’t foresee any drop in desirability for homes near transport hubs – which remain a key objective for both investors and tenants in their searches.
So what does this mean for investors? It means that already we’re seeing a shift in tenant priorities and the early signs of a new market trend – where tenants are more discerning about the space that 2-bed apartments or 3-bed apartments can offer.
While transactions are expected to remain at their current level – which is a marked improvement on the last few months – the possibility of a sustained improvement depends on the reaction of the wider economy.
That said, for the savvy investor that wants to take advantage of this potential new ‘mini-boom’, there are clear signs of what tenants want – bigger, greener spaces to live.