Revealed: Which type of home is seeing the highest price rise?

A UK high street bank has revealed the type of home that has seen prices increase the most, with prices for flats increasing at a faster rate than detached properties.

Halifax said there has been a switch in demand, reversing the ‘race for space’ that was seen during the pandemic when homebuyers chose larger properties.

According to Halifax’s research, in the year to February, the average price of a flat increased by 2.7%, while the average terraced property value rose by 2.6%. Prices for semi-detached and detached homes increased at lower rates, rising by 1.7% and 2.0% respectively.

Average percentage increases in UK properties by type

  • Flat – 2.7%
  • Terraced House– 2.6%
  • Semi-detached House – 1.7%
  • Detached House – 2.0%

Mortgage affordability and higher interest rates have made homebuyers think carefully before making a move, but Halifax added that as rates have stabilised and activity has started to pick up, it is smaller homes that have recorded the strongest increases in price growth in the early part of this year.

It seems property searchers have been adjusting their expectations in light of higher borrowing costs, as well as coping with the general cost-of-living squeeze, the bank suggested.

Halifax also added that a ‘resilient’ first-time buyer market has also had a positive impact as 53% of people who obtained a mortgage in 2023 were first-time buyers – the highest proportion since the mid-nineties.

Amanda Bryden, head of Halifax Mortgages, said: “As interest rates have stabilised and buyers adjust to the new economic reality of owning a home, one way to compensate for higher borrowing costs is to target smaller properties.

“This is especially true among first-time buyers, who have proven to be resilient over recent years, and now account for the largest proportion of homes purchased with a mortgage in almost 30 years.

“We see this reflected in property prices for the first few months of this year, with the value of flats rising most sharply, closing the ‘growth gap’ on bigger properties that’s existed for most of the last four years.”