Flats and apartments have seen a surge in popularity for a number of reasons among buyers, and new data reveals their significance for the property sector.
Sales of flats are currently 10% above pre-pandemic levels of 2019, according to new data revealed by Rightmove. This jumps to 23% when looking at London, where sales have strengthened in volume even more due to the high demand in the capital.
Across the housing market as a whole, the number of sales being agreed has now returned to pre-pandemic levels for the first time since September, but it is flats and apartments that have seen the strongest revival, pulling the whole sector along, according to the figures.
When looking at all housing types, the number of sales agreed is currently around 18% below what it was last year, as the market has been stemmed somewhat due to a natural post-pandemic slowdown, rising inflation and interest rates, and the cost of living crisis.
As Tim Bannister from Rightmove points out, the fact that the housing market seems to be stabilising at a more “normal” level – rather than the galloping pace we experienced in the aftermath of Covid – is a positive sign. He reiterates, too, that now is the time for sellers to ensure their pricing is right before listing.
Why are flats in favour?
There are a number of reasons behind the surging popularity of flats across many parts of the country, and particularly in the UK’s city centres. There have been other recent reports noting similar patterns, including in the rental market where tenants are showing greater interest in flats than houses.
Another agency, Chestertons, has noted a growing trend towards buyers seeking flats, too, and Robert Sturges, central London area director, pointed out some of the reasons behind the resurgence.
“Our offices carry a high proportion of flats and we have noticed a significant upswing in buyer demand for apartments of all sizes. This demand for flats is driven by professionals who wish to shorten their commute, parents who invest for their children but also overseas buyers who are taking advantage of favourable currency exchange rates.
“In the face of rising living costs, some buyers may also decide that a flat is financially more viable than a house at this moment in time. Another driving force behind the demand for flats are renters who review their finances amid rising rents and decide that, despite higher mortgage rates, buying presents a better option long-term. We are therefore seeing a number of first-time buyers entering the market.”
New-build flats in particular are increasingly sought after among buyers, investors and tenants alike. They provide the highest energy efficiency credentials, with the lowest energy costs, and can therefore be a much more future-proof option than an older property.
Realistic pricing in the market
Rightmove’s latest research also looks at how prices are faring in the housing sector, with Bannister pointing out that the market is “surprisingly robust” despite external factors.
It found that the average price reduction – meaning the amount sellers were accepting on their property compared with their initial listing price – is now at 6%, which is very similar to pre-pandemic levels. This is the equivalent of around £22,000 on today’s prices.
Meanwhile, around a third of properties listed currently end up accepting a lower price, which again mirrors 2019’s figures and demonstrates a more “normal” market.
Tim Bannister said: “The market is remaining surprisingly robust given the economic headwinds that have affected movers over the last six months. While the market is by no means at the exceptional level it has been over the last couple of years, it is a positive sign for agents that sales at a national level are being agreed at the same rate as the last more normal market of 2019, though there are regional differences across Great Britain.
“The level and size of reductions has also returned to its pre-pandemic norm, though pricing right the first time can often lead to a quicker sale, so it’s important for sellers to speak to an agent about their local market so that they price realistically and give themselves the best chance of finding a buyer.”