Flat prices have surged by an estimated 32% over the last 10 years according to fresh data from Halifax, as heightened demand from first time buyers and rapidly escalating property prices in London, the majority of which are flats or apartments, are thought to have extensively contributed the swelling in cost.
Increasing by £425 a month since 2004, the average cost of a flat in the UK has risen by almost £51,000 to a staggering £208,169. This 32% increase is over twice as much as the 15% increase seen by all UK properties across the same time period – from 2004-2014.
To break down the price movement of other types of property from 2004-2014, terraced homes have increased at the next quickest rate rising by 23%; semi-detached homes have grown by 15% in cost, whilst detached homes have increased slightly less by 12%. Bungalows have increased by roughly 13% in cost, representing the slowest rate of price increase.
Semi-detached homes and terraced homes are the choice property for the majority of Britons over the past 10 years – an accurate representation of this year’s completed transactions with the two types of residence in question comprising almost two thirds of all home sales in 2014. This can be seen as a potential consequence of the Help to Buy scheme’s success thus far, with over 40,000 transactions aided by the government’s flagship housing programme to date.
“There has been a significant increase in the number of first-time buyers since 2010 compared with a modest decline in the number of those moving home,” said Martin Ellis, top housing economist at Halifax.
“This difference is reflected in a bigger rise in prices over the past five years for those property types that are most popular with first-time buyers, flats and terraces.
“Since 2009, larger property types such as detached homes, semis and bungalows have underperformed flats and terraces. The demand for such properties has been partly constrained by a widespread lack of equity amongst homeowners who bought for the first time around the peak in the market. Many of these homeowners are still finding it difficult to finance a move to a larger home.”
Flats have indeed supplanted detached houses as the least affordable property on the market for prospective residents, and much of this can be put down to the capital’s overheated housing market, the majority of which is made up of exorbitantly priced flats and so-called ‘studio spaces’ which are in fact some of the dingiest spots in town, stuffed with the bare essentials, yet marketed at over-inflated values. A lack of affordable supply has also been a pressing issue in recent times, and when increased demand from first-time buyers is accounted for, it’s clear to see how estate agents have overseen some of the most preposterously inflated sums ever paid for flats.
Latest findings show that there are an average of 9 prospective buyers for each property on the market across the UK. Such levels of competition show, despite a thriving private rental sector – for landlords at least, the primary ambition for the majority of Britons remains the procurement of a place of their own.
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