Restoring buyer confidence in flats is critical to revitalising the housing market, according to Andy Hill, CEO of Hill Group.
Speaking to The Times, Hill noted that flats have historically served as entry points for first-time buyers but have lost appeal in recent years. “[Flats] used to be the stepping stones, [but] lots of first-time buyers now try to move further out and get a small house,” he said.
Market performance gap
The flat market has significantly underperformed compared to houses. Data from Zoopla shows house prices have increased 43% since 2016, whilst flat prices have risen just 10% over the same period.
Hill attributed the decline in flat popularity to fire safety concerns following the Grenfell tragedy and dissatisfaction with the leasehold system. He acknowledged that product quality must improve to meet changing buyer expectations.
“If we want to build at pace and build large numbers [of homes] close to railway stations, we’ve got to get apartment living back on the agenda as being seen as a good option, whereas at the moment it isn’t,” Hill stated.
Design changes
The Hill Group has implemented design changes following the pandemic. “One thing we learned from Covid was that we would never build another flat without its own personal outside space,” Hill said.
The flat market’s performance contrasts with broader trends in the UK housing market, which has shown resilience despite economic headwinds. Meanwhile, the build to rent sector has attracted £2.2bn in investment during the second quarter, suggesting continued institutional interest in apartment developments.
Market implications
The recovery of the flat market could have significant implications for housing delivery targets, particularly in urban areas where land constraints favour higher-density development. First-time buyer access to homeownership may also depend on restoring confidence in apartment living as an affordable entry point to the property ladder.
