Flats cost more in the UK than semi-detached properties, new research shows
On average home buyers in the UK are paying almost £20,000 more for flats than semi-detached properties, new research has found.
This could be one reason why first time buyers are bypassing flats in favour of semi-detached homes, according to a study by leading lender the Halifax.
It shows that the average price of a flat in the UK has risen by £86,474 since property prices were at their lowest in late 2008 from £150,749 to £237,223 at the end of 2015.
The 57% increase in the average price of a flat is significantly higher than the 37% rise for all residential properties over the same period. Additionally, it means that buyers are on average now paying almost £20,000 more for a flat than for a semi-detached home.
Detached homes recorded the smallest rise at 20% over the past seven years, while terraced and semi-detached houses saw price rises of 38% and 34% respectively since 2008.
The research report explains that a considerable proportion of the national rise in flat values since 2008 is due to the rapid increase in flat prices in London with growth of 62% Flats represent a much higher share of the property market in London than elsewhere with 50% of sales in the capital being flats compared with a UK average of 17%.
However, if London performance is excluded, then price growth is greatest for terraced homes at 31%, closely followed by semi-detached houses at 29% and flats at 26%. Detached home properties remain the worst performer with 19% growth on this basis.
Prices have increased by around 20% across all property types since 2013 with the exception of detached properties, which have seen a much lower rise of 8%.
‘The high prices being paid for London flats have had a significant impact on the national picture when it comes to property type winners and losers. This is the result of more flats being sold in the capital and at the higher end of the market. Such is their popularity that flats continued to outperform other property types in the capital last year, with an annual price growth of 17% by the end of 2015,’ said Martin Ellis, housing economist at the
The research also shows that at 30% terraced homes are the most popular followed by semi-detached at 29% as was the case in 2008. But there have been some changes in market composition over the past seven years, with an increase in the share of semi-detached homes from 25% to 29%, whilst the proportion accounted for by flats has fallen from 22% to 17%.
This shift from flats to semis has been particularly marked for first time buyers. Semi-detached homes have risen in popularity, accounting for 29% of purchases in 2015 compared with 23% in 2008. However, flat sales for first time buyers have fallen from 32% of all property sales to 23% over the same period.
‘Semi-detached and terraced homes have remained the most popular property types amongst purchasers, and increasingly so for first time buyers. Whilst many might expect a flat to be the most typical first step on the housing ladder, it is clear that this is shifting with more and more first time buyers bypassing this option, choosing a semi-detached house instead,’ said Ellis.
The figures from the research shows that a typical flat costs less than £120,000, below the current lowest stamp duty threshold in the North of England, Wales and Yorkshire and the Humber, and costs between £120,000 and £145,000 in the North West, West Midlands, East Midlands and Scotland.
Whilst average flat prices are lower than for any other property type in London, at £385,269, they are considerably higher than flat prices anywhere else in the UK while the average price of a terraced home is between £120,000 and £147,000 in all regions outside southern England.