As detached house sales continue to struggle, interest in semi-detached and terraced properties has seen a revival while general confidence in the housing market picks up.
The largest proportion of home sales in the UK over the second quarter of 2018 was made up of smaller homes, new research by TwentyCi has found, with terraces and semi-detached houses accounting for 55% of all property exchanges during the three months to July.
Having driven overall housing market growth over the past year, the property types have overtaken both detached homes and flats in terms of sales numbers, a sign that the property market is continuing to change.
Year-on-year, the number of terraced houses exchanged has risen by 8% to 61,000, while semi-detached home sales have increased by 6% to 55,000 exchanges between Q2 2017 and Q2 2018. In contrast, the number of detached houses exchanged in the second quarter this year compared to 2017 has plummeted by 12% to 35,000, while the number of exchanges on flats has seen an 8% decline to 31,000.
Why is the market changing?
One reason behind this changing trend could be the fact that flats now dominate the rental sector in most major towns and cities, as opposed to the sales market, and are the preferred option for long-term investment among buy-to-let landlords and investors. With the rise of Generation Rent, as people put off climbing onto the property ladder until later in life, this could be something that is set to continue – particularly as build-to-rent is gaining more market share in the sector.
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In terms of detached homes, it could be that the owners of these properties are choosing to stay put as opposed to downsizing later in life, with equity release becoming a more popular route to gaining access to property cash. An increase in multi-generational living, with youngsters staying at home with their families for longer, could also be behind some of the lack of sales in this end of the market, as well as high stamp duty costs for more expensive properties serving as a deterrent for some buyers.
Kate Faulkner, managing director at Propertychecklists.co.uk, said: “With some indices and market reports suggesting we have a market currently in the doldrums, this in-depth data shows that this very much depends on the market consumers are operating in.
“For example those selling properties over a million pounds are having to discount – and if in London, selling times are around five months. In contrast, terraces and semi-detached properties under a million pounds are dominating transactions currently. The summer months will be crucial to finding out which way the market goes for the rest of 2018.”
