Family home house prices have grown by 7.3 per cent, outstripping the price growth of flats, new research reveals.
The latest Nationwide and Zoopla house price index revealed that family homes, particularly detached and semi-detached properties are currently the most in-demand property types across the country. Not only has this style of property seen an increase in transactions, but house price growth has soared.
‘There has also been a shift in the composition of property types that have been transacting. Over the past six months the proportion of sales involving detached and semi-detached properties has increased, while the proportion involving flats has declined significantly,’ explains Robert Gardner, Nationwide’s Chief Economist.
Zoopla’s latest house price index found that demand for family homes had doubled in the past year alone. While three-bedroom houses remain the most in-demand type of property in the UK, four and five-bedroom houses were selling 33 per cent faster in 2020 than in 2019.
In areas such as London and south east England, where flats were originally the most in-demand, there has been a shift towards house hunters searching for three-bedroom houses. Across the country, the demand for flats has failed to keep pace with that for houses.
In June 2020, the recorded price growth of flats and houses was almost equal at 1.4 and 1.9 per cent. However, over the last year, the prices for houses have risen by 7.3 per cent. In contrast, flats saw price growth of just 1.4 per cent, the same as last year.
‘Demand for houses is still outstripping demand for flats,’ explains Grainne Gilmore, head of research at Zoopla. ‘To a certain extent this trend will have been augmented by the stamp duty holiday, with bigger savings on offer for larger properties – typically houses.’
‘But underneath this, there is a continued drumbeat of demand for more space among buyers, both inside and outside, funnelling demand towards houses, resulting in stronger price growth for these properties.’
Interest in high-priced homes growing
The stamp duty holiday has not only helped first-time buyers get a foot onto the property ladder, but it has helped existing homeowners afford more spacious and expensive family homes.
Robert Gardner from Nationwide points to the latest Land Registry data that shows an increase in the transaction of higher-priced homes. ‘The number of transactions involving properties bought for £500,000 or higher increased by 37% over the 12 months to March 2021, compared to a rise of 2% for all properties,’ he explains.
That means that over the last year the number of transactions involving a property valued at £500,000 or above has increased by 6 per cent to 18 per cent.
Robert Gardner suggests that it shifting housing preferences caused by the pandemic that are driving the increased activity in the housing market.
‘At the end of April, 25% of homeowners surveyed said they were either in the process of moving or considering a move as a result of the pandemic. Given that only 5% of the housing stock typically changes hands in a given year, it only requires a relatively small proportion of people to follow through on this to have a material impact.’
If you’re looking to sell your family home now could be a great time to sell your home quickly while demand is outstripping supply. However, you might find yourself struggling for choice when looking for a new family home unless you’re interested in a flat that is.