The average price of a flat in the UK has increased by 53% in the last seven years, much more than the rise of 39% recorded for all property types, new research shows.
The data from lender the Halifax also shows that the average price of a flat in London is £230,894 more than rest of UK and detached home prices have increased the least, rising by 19% since 2009.
Terraced homes have recorded the next largest increase in average prices with a rise of 43% and the research also shows that terraced and semi-detached homes are most popular types of property, representing 60% of all home sales in 2016 while first time buyers favour terraced and semi-detached homes.
Overall the average price of a flat nationwide increased by £84,644, or £1,008 per month, in the past seven years from £159,292 in the fourth quarter of 2009 to £243,936 in the fourth quarter of 2016, research shows.
A considerable proportion of the national rise in flat prices since 2009 is due to the rapid increase in flat prices in London at 65%, where flats represent 48% of all sales compared with the UK average of 11%.
The average price of a flat in London is £398,038, meaning that buyers are on average paying £230,894 more than flat buyers in the rest of the UK at £167,144. However, if London performance is excluded, price growth is greatest for terraced homes at 41%, followed by flats at 35%.
Terraced homes at 30% and semi-detached, also at 30%, continue to be the most popular property types, representing 60% combined of all home sales in 2016. There have been some minor changes to this composition in the past seven years with terraced homes falling from 32% to 30% and semi-detached homes increasing slightly from 29% to 30%.
Whilst terraced properties remain the most popular property type with first time buyers, the proportion of sales has fallen over the past seven years from 42% to 37%. In contrast, semi-detached properties have risen in popularity with first time buyers, accounting for 30% of purchases in 2016, up from 28% in 2009.
With an average price of £215,690, terraced homes are the most affordable property type in the UK, followed by semi-detached at £225,070 and then flats at £243,936. Outside London, however, flats are the most affordable at £167,144, followed by terraced at £185,116.
Flats cost less than £125,000, on average, in the North at £116,855, followed by Yorkshire and the Humber at £124,734 and the East Midlands at £123,561. Whilst average flat prices are lower than any other property type in London, at £398,038 they are considerably higher than flat prices anywhere else in the UK.
‘Nationally, terraced and semi-detached homes are the most affordable and popular homes with buyers accounting for 60% of sales during 2016. However average price growth for flats, helped by the London market, have outperformed all other property types since 2009,’ said Martin Ellis, Halifax housing economist.
‘There has been an increasing trend for first time buyers to choose semi-detached homes over the past seven years, whilst terraced homes have shown a decline in popularity. The rise in the age of a typical first time buyer may partly account for this change in preference towards the family friendly semi,’ he added.