Halifax has introduced some really interesting data analysing how well different property types have performed by region.
Here’s a summary of what they’ve done and if you are buying or investing, it is worth bearing these stats in mind when making your decision.
Housing market downturn 2007-2009
When property prices plummeted between 2007 and 2009, here’s how each property type fared:
Terraced houses – down by 33%
Flats – down by 32%
Detached – rather better but still down by -26%
Bungalows – best performing of all, but still struggling at -21%
Housing market recovery in last five years 2009-2014
All property types have seen a substantial increase as the housing market has improved in the last five years. Here’s how they look now:
Flats – best performing, at +43%
Terraced houses – doing well at +31%
Detached – further down at +20%
Bungalows – smallest gain at +15%
London has led flat price increases (+44%) with other areas of the UK trailing, second highest being in the South East (+20%) and poorest performing in the East Midlands and Yorkshire and the Humber areas (both at just +3%).
Martin Ellis, housing economist at the Halifax, comments, “There has been a significant increase in the number of first-time buyers since 2010, compared with a modest decline in the number of those moving home. This difference is reflected in a bigger rise in prices over the past five years for those property types that are most popular with first-time buyers: flats and terraces.
Since 2009, larger property types – such as detached homes, semis and bungalows – have underperformed flats and terraces. The demand for such properties has been partly constrained by a widespread lack of equity amongst homeowners who bought for the first time around the peak in the market. Many of these homeowners are still finding it difficult to finance a move to a larger home.”
The regional outlook however is more encouraging than headlines suggests
Despite scary headlines suggesting that buyers need tens of thousands of pounds, and tens of years, to save for a deposit, that’s not quite true according to the latest data from the Halifax.
A flat costs less than £100,000 in the North and Central regions, so requiring a 5% deposit would mean only having to raise £5,000. And no stamp duty either!
A detached property, though, is harder to afford and on average will cost £225,000 across the UK. But this still only requires a 5% deposit of just £10,000 under Help to Buy, and attracts only 1% in stamp duty.
London, of course, is pricier and a typical flat will cost on average £328,800, which is still the least expensive option since a detached property will cost an average of £706,000 (and £481,000 in the South East).
Read - First time buyer quick guide
Regional differences in average house price from 2004-2014
In general terms London led the field again at an average increase across all property types of 30% but interestingly, Scotland was neck-and-neck at 30%.
This is against a UK average of 15%.
Flats showed the biggest fluctuation in price by region, with Scotland leading the way at 43%, while the East Midlands chalked up a dismal -19% over the same period.
Sales to first-time buyers and home movers in 2004-2014
And the price increases reflect movement in the market, so terraces sold the most. Here’s a breakdown of the percentage of property types sold over the last 10 years.
Looking at the 6 months to June 2004:-
Home movers showed more interest in semi-detached properties, accounting for 27% of sales with detached homes not far behind at 28% and 27% for the same two periods.
So, the property type you buy does matter financially and the trends suggests although terraces have performed well over the last 10 years, the next 10 years may see semi- detached properties perform better as the young trade up and the old trade down.
Read - First time buyer legals
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