When it comes to what type of property makes the best investment, in recent years it appears that buyers of flats/apartments in London have reaped the greatest rewards. A Halifax report shows that while the average growth of price growth across all properties in the UK from 2009 to 2016 was 39%, for flats that increase jumps to 53%.
Where the average cost of a flat in the UK was £159,292 in the fourth quarter of 2009, by the final three months of 2016, that had surged to £243,936. Detached houses have seen the slowest pace of growth – 19% - from £290,208 in 2009 to £345,833.
London Leads the Way
As you might expect, the upward lift of flat prices has been driven by London. The average price of a flat in London in the last quarter of 2016 was £398,038. That dwarfs the £116,855 average price of flats in Northern England, but, it’s also a lot higher than the £222,325 average price of flats in south east England.
Put another way:
- Total UK average price of a flat in 2016 - £243,936.
- UK average flat price, excluding greater London - £167,144.
Of course, the high cost of London property tends to skew national figures upwards across all types of properties. However, the difference in the cost of flats is particularly striking, as it has elevated the price growth of apartments so they’ve risen above any other type of home.
The Halifax research spells it out by showing London flat prices have risen 65% over the last 7 years with flats representing 48% of all property sales in the city. By contrast, the UK excluding London, flat sales accounted for 11% of sales during the same seven-year period.
Terraced and Semi’s Prove Popular
Returning to the national picture of the UK’s housing market, terraced and semi-detached properties have proven the most popular, when it comes to purchasing activity. Together, they account for 60% of all UK residential property sales, the Halifax research shows.
Looking at price growth, the average price of a terraced home has risen 43% from £150,307 in 2009 to £215,690 in 2016. For semi-detached homes, a rise of 39% from £166,024 to £225,070, has been recorded.
However, what that average price change over the past seven years doesn’t show, is that more recently, there has been a growing trend of first-time buyers preferring to buy semi-detached homes over terraced properties.
“There has been an increasing trend for first time buyers to choose semi-detached homes over the past seven years, whilst terraced homes have shown a decline in popularity,” said Halifax housing economist Martin Ellis. “The rise in the age of a typical first time buyer may partly account for this change in preference towards the family friendly semi.”
Overall then, while the research shows outperformance of the London market for flats, the picture for the rest of the country is rather different.