Flats prices have risen by more than twice the average for all properties, according to the Halifax.
The bank’s research shows flat prices nationally have outperformed all property types since 2009 due to increases in London.
The 32 per cent increase in the average price of a flat is more than double the 15 per cent rise for all residential properties over the same period.
Detached homes (12 per cent) and bungalows (13 per cent) have recorded the smallest rises over the past 10 years.
Martin Ellis, housing economist at Halifax, comments:
“There has been a significant increase in the number of first-time buyers since 2010 compared with a modest decline in the number of those moving home. This difference is reflected in a bigger rise in prices over the past five years for those property types that are most popular with first-time buyers: flats and terraces.
“Since 2009, larger property types – such as detached homes, semis and bungalows – have underperformed flats and terraces.
“The demand for such properties has been partly constrained by a widespread lack of equity amongst homeowners who bought for the first time around the peak in the market. Many of these homeowners are still finding it difficult to finance a move to a larger home.”
Regional differences
Whilst flats have increased most in price nationally since 2004, much of this rise is due to the performance of flat prices in London, where flats represent a relatively high proportion of the property market.
Terraced homes have been the best performing property type in the greatest number of regions (five of the 12): North West, Yorkshire and the Humber, West Midlands, East Midlands and East Anglia.
Semi-detached and terraced homes have remained the most popular types of property purchased over the past ten years. These two types represent 60 per cent of all home sales in 2014; up from 56 per cent in 2004.
For first-time buyers, semi-detached homes have risen in popularity, accounting for 29 per cent of purchases in 2014 compared with 25 per cent in 2004. Detached sales have fallen from 21 per cent of all property sales to 16 per cent over the past decade.
Over the past five years prices have improved across all property types, with flats recording the largest increase between 2009 and 2014 (43 per cent).
Terraced properties (31 per cent) experienced the next biggest rise. Bungalows have seen the smallest gain (15 per cent).
The increase in flat prices nationally has been led by London (44 per cent) with a more subdued performance elsewhere in the country.
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