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 mean cost of a flat in the UK has risen by almost £51000 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 ñ 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 home 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 ñ an accurate representation of this yearís 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 schemeís success thus far, with over 40,000 transactions aided by the governmentís 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 Capitalís overheated housing market, the majority of which is made up of exorbitantly priced flats and so-called ëstudio spacesí 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 is clear to see how estate agents have overseen some of the most preposterously inflated sums ever paid for flats.
Paul Smith, CEO of Haarts, has stressed that sellers ought to exploit current conditions, and that the coming autumn is a pivotal time for anyone seeking to cash in on record high property prices.
“People now see the reality that interest rates will rise early next year but are keen to take advantage of current market conditions, ” said Paul Smith, CEO of Haart.
“Our message to people thinking about selling is that autumn is crunch time. Good mortgage deals are still plentiful but wonít last forever. Buyers do have increased choice right now but the strong competition that remains in the market will ensure that those selling now have the best chance at the best price.”
Haart found 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 ñ 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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