Flats Outperform All Other Types of Property

New research from the Halifax shows that the average price of a flat in the UK has risen more sharply in percentage terms than any other type of property over the past ten years. The average price of a flat sold has risen from £50,355 in 1992 (Quarter 3) to £125,587 in the third quarter of 2002: an increase of 149%. This compares with an increase of 112% for all properties.

The Halifax research also shows that terraces have seen the next largest rise with a 120% gain since 1992. Despite increasing more slowly than flats and terraces, the average prices of semi-detached and detached houses and bungalows have all more than doubled in the last 10 years, rising by between 102% (detached) and 106% (semi-detached and bungalows).

Prices by Property Type: 1992 Q3 - 2002 Q3

Source: Halifax House Price Index. Figures are simple arithmetic averages.

Flats have recorded the largest percentage increase in price in each region on the British mainland over the last ten years with the exception of East Anglia where semi-detached homes have seen the biggest gains.

In all four regions of Southern England - London, the South East, the South West and East Anglia - detached properties have witnessed the smallest percentage gains since the third quarter of 1992.

Regional Price Changes (%): 1992 Q3 - 2002 Q3

Source: Halifax House Price Index. Figures are based on simple arithmetic averages. N/a - not available due to insufficient sample size.

Socio-economic changes drive price growth

• The number of one-person households increased by one million between 1991 and 2001 from six million to seven million whilst the number of households with children fell from 7.4 million to 7.0 million (Source: ONS 'Social Trends' 2002). These trends have resulted in an increased demand for smaller properties at the expense of larger semi-detached and detached houses.
• The latest figures from the Office of the Deputy Prime Minister show that one and two bedroom homes fell to 29% of all private enterprise housebuilding completions in England in 2000/01 from 45% in 1990/91. Over the same period, the proportion of four or more bedroom houses increased from 24% to 36%. (See Editors' Notes for source details.)
• There is now less difference between the price of property types and the average price for all properties in percentage terms than a decade ago as a result of the pattern of prices rises since 1992. The average price for a terraced home, for example, is 77% of the average for all homes compared with 74% in 1992. At the other end of the spectrum, the average price of a detached house is currently 57% above the all property average compared with 65% higher in 1992 Quarter 3.

Regional variations

• Terraces and semi-detached homes have seen the smallest percentage increases in the North, Yorkshire and the Humber, the North West, the West Midlands, Scotland and Wales in the past ten years.
• Detached houses and bungalows are consistently the most expensive property types across the UK with the exception of London where the average prices for both semi-detached and terraced properties exceed the average price of a bungalow. This reflects the fact that the few bungalows that exist in the capital are located in the outer reaches of Greater London where prices tend to be lower.
• Semi-detached homes are the next most expensive property type after detached houses and bungalows in 10 of the 12 regions of the UK. The exceptions are London where only detached homes are more expensive and in Wales where the average price of a flat exceeds that of a semi: £93,452 against £80,758 in the last quarter.
• There has been a trend for flats to become more expensive than terraced houses in parts of the UK over recent years. The average selling price of a flat exceeded that of a terrace in the North, Yorkshire and the Humber, the North West, the East Midlands, Wales, Northern Ireland and Scotland in 2002 Quarter 3. This marked a change in the North, Yorkshire and the Humber, the East Midlands and Scotland where the average price of a flat was lower than that of a terrace ten years ago.
• In London, flats remain the least expensive type of property despite a 209% rise in the average selling price during the past ten years.

Martin Ellis, Chief Economist, said:

"The particularly big increase in the price of flats largely reflects the increase in the number of single person households over the last decade or so. This trend emphasises the need for planners to encourage an increase in the right type of properties to cater for the changing requirements of the home-buying population of the UK."

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