New research from the Halifax shows demand and prices for larger and detached properties have surged as buyers hunt more space – particularly for working from home.
Prices for a typical UK detached house have risen 5% since March this year, according to the Halifax House Price Index, while values for the average flat rose 2.5% and terraced and semi-detached properties increased by around 4% over the same period.
There was correlation between buyer profiles too: prices paid by first-time buyers – typically those buying flats and cheaper properties – increased at a slower rate of 2.4% between March and September, yet prices for existing homeowners moving house typically increased by 4%.
Halifax MD Russell Galley said: “We’ve seen a fundamental shift in demand from buyers as a result of increased home working and a desire for more space. There’s now evidence that it’s this push for larger properties that has been driving the mini-boom witnessed in the housing market since lockdown restrictions were first eased over the summer.
“This level of price inflation hasn’t deterred would-be buyers though as, in the three months up to September, we received more mortgage applications from both first-time buyers and home movers than at any time since 2008. However, we continue to sound a note of caution on the longer-term prospects for house price inflation, with the full economic impact of the pandemic likely to be felt more keenly over the winter.”
While average prices for detached properties rose across all UK regions, the strongest inflation was in the North West and Yorkshire and Humberside (6%) followed by the East Midlands and the South West. Since March, the price of detached houses in all these regions has increased by over £20,000. South East and Greater London increases were less significant, at around 2%.
Semi-detached houses displayed similar trends, with the West Midlands (4.8%), South West (4.6%), North West (4.1%) and Eastern England (4.0%) leading the way, compared to modest gains in the South East (2.3%) and Scotland (0.7%).
However, average prices for flats across the UK increased at a much slower rate and even fell in some areas. Data for the six months to September shows that the price of flats in the West Midlands (-0.1%), Yorkshire and Humber (-0.3%) and the South West (-1.6%) are all lower than they were six months ago.