Apartment prices have outperformed all other property types in the UK, jumping by more than £86k since 2008
What’s the latest?
The average cost of a flat has soared by more than £1,000 a MONTH since the global financial crisis, outperforming all other property types.
Apartment prices in the UK have jumped by £86,474 overall, from a low of £150,749 in late 2008 to £237,223 at the end of last year, according to mortgage lender Halifax.
And the 57% increase in average apartment prices is considerably higher than the typical 37% rise for all types of homes.
Why is this happening?
Much of the surge has been driven by strong growth in London property values. Flats in the capital accounted for half of all sales, compared with an average of just 17% across the UK as a whole.
But if properties in London are excluded, the typical cost of a flat has risen by only 26% during the same time spell, meaning both terraced and semi-detached homes have outperformed them, with values rising by an average of 38% and 34% respectively.
Who does it affect?
Buyers are now typically paying nearly £20,000 more for a flat than for a semi-detached property, with only detached homes and bungalows commanding higher average prices nationally.
Unsurprisingly, the relatively hefty price tag of flats has led many first-time buyers to purchase a terraced or semi-detached property instead.
Martin Ellis, Halifax housing economist, said: “Semi-detached and terraced homes have remained the most popular property types among purchasers, and increasingly so for first-time buyers.
“While many might expect a flat to be the most typical first step on the housing ladder, it is clear that this is shifting with more and more first-time buyers bypassing this option, choosing a semi-detached house instead.”
Sounds interesting. What’s the background?
Nearly a third of first-time buyers bought a flat in 2008, but the proportion had fallen to just 23% by the end of last year.
By contrast, 29% of people buying their first home opted for a semi, up from 23% seven years ago.
But despite the sharp rise in prices, flats still represent the best option for buyers on tight budgets in many parts of the country.
In the north, Wales, and Yorkshire and the Humber, the average cost of a flat is less than £120,000, below the lowest Stamp Duty threshold.
And in London, flats are also cheaper than any other property type, even if they are typically valued at £385,269 – nearly double the average house price across the UK as a whole.
Top 3 takeaways
The average cost of a flat has soared by £1,029 a month since the global financial crisis.
The price of apartments has outperformed all other property types, rising by £86,474 since 2008.
The typical flat has increased in value from £150,749 in late 2008 to £237,223 at the end of last year.