The latest UK house price index from Halifax shows yet another uptick in the country’s property values, but it seems the “race for space” may be starting to lose its shine for some.
A 1% monthly rise in property prices in November has marked a 15-year high in house price growth, according to the latest data compiled by Halifax. With the average home in the UK now costing £272,992, values have risen almost £13,000 since June this year.
On an annual basis, house price growth reached 8.2%, adding around £20,000 to the value of an average home. In London, house prices have reached a colossal average of £521,129, but growth there has been by far the slowest in the country, with an annual rise of only 1.1%, says the bank.
But house price rises haven’t been evenly spread across all property types, it seems. While larger, more remote homes seemed to soar in popularity in the wake of the pandemic, flats and city centre locations are once again coming to the fore, according to the research.
House price shifts across property types
Halifax says that house price growth for flats has in fact begun to outpace that of detached houses in its latest findings. The price of the average flat has risen by more than 10% over the past 12 months, whereas prices of detached homes have increased by just 6.6%.
The stamp duty holiday caused a big swell in property transactions across the UK. But this also skewed buying trends as more people were inclined to try and buy bigger properties to make the most of savings. Yet for landlords and property investors in particular, the stamp duty holiday could also be used to benefit from buying a flat that may otherwise have not been attainable.
During the pandemic, many people found their lifestyles and work styles had drastically changed. Home-working became – and in many cases remains – the norm. So buying a larger property outside the city centre became more appealing. But since things have opened up, with many returning to office life at least some of the time, the draw of living in the city centre is making a comeback.
More competition for flats
Property portal Rightmove has also reported a shift in what people are looking for. Its latest data from last month showed that more people were searching for flats now, while earlier in the year it was detached homes.
Of course, the figures are honing in on buyer demand, but behavioural trends will certainly be reflected across the private rented sector. While some tenants may have sought out larger, more remote homes during the pandemic, there is evidence to suggest that many renters are still keen to live in cities and major towns, close to work and other conveniences.
Rightmove’s property data expert Tim Bannister said: “A shift in demand from bigger houses to flats has emerged as more of society has opened up again and people have assessed where they will work throughout the week, with many now considering a move closer to a city than further out.
“Prospective buyers looking for a flat, with a must-have for many of them now being a shared garden or balcony, will find there’s more availability than other property types and lower average asking price growth over the last year, but there’s now more competition.”