0:01 AM, 20th March 2025, About 4 weeks ago
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The popularity of larger homes has propelled UK house prices upwards by £10,431 in the past year, marking a robust 3.7% climb, Halifax data shows.
As borrowing costs softened with falling interest rates, buyers shifted their sights to bigger properties, leaving flats trailing with a 3.2% uptick, averaging £168,569.
Meanwhile, detached residences soared by 4.1% to £471,748 – over five years these homes have ballooned by more than £100,000, highlighting a trend towards roomier homes.
Terraced dwellings topped the growth charts, growing in value by 4.5% to £235,296, while semi-detached homes gained 3.8%, reaching £307,685.
Amanda Bryden, the head of Halifax Mortgages, said: “The fortunes of different property types tend to ebb and flow depending on broader market conditions.
“This time last year, the average price of a flat had risen more quickly than a detached house, as buyers adjusted to higher borrowing costs and sought to compensate by targeting smaller properties.”
She adds: “Now, as interest rates have started to ease, it’s once again those homes offering more space which are fuelling demand.
“And that’s not just a short-term trend; over the last decade, bigger properties have tended to outperform smaller homes when it comes to price growth.”
Halifax says that the UK housing market has rebounded from a sluggish 2024 start, with prices now exceeding the August 2022 peak of £294,818.
The North East boasts the steepest rise in flat values, jumping 15.1% to £100,123, whereas the East Midlands saw a dip of -0.6%.
For terraced homes, the North East again leads with an 8.4% increase, contrasting Yorkshire and Humberside’s slower 2.7%.
Northern Ireland’s semi-detached houses surged by 7%, while Scotland lagged at 0.7%.
First-time buyers, buoyed by a 20% surge in market entry last year, leaned towards bigger homes, with terraced properties up 3.5% and flats at just 1.8%.
Flats dominate 71% of purchases in costly London but drop to 4% in the East Midlands.
New-build flats defied the sluggish trend, leaping 6.7% against an overall new-build rise of 3.1%, though buyers still fork out a £71,865 premium over existing flats.
The cost gap between property types has widened since 2000, with detached homes now £164,063 pricier than semi-detached, up from £51,655.
Yet, the relative gap between flats and detached homes edged up slightly from 2.7 to 2.8 times over 25 years.
The president of NAEA Propertymark, Toby Leek, said: “Not only are buyers looking to take advantage of easing interest rates to secure a bigger home, but other trends, such as a continued increase in people looking for parking spaces and electric vehicle charging, as well as the surge in desire for outside space post-pandemic are pushing more buyers to pursue larger properties with driveways and gardens, moving away from apartments and flats.
“Terraced homes are likely proving popular amongst buyers as they often offer a home with a larger garden and parking at a more affordable price allowing many to maintain a sustainable financial balance.”
He added: “As different areas across the country offer more value for money, it’s likely we will continue to see buyers adjusting their criteria and broadening their search areas.”
Tom Bill, the head of UK residential research at Knight Frank, said: “As mortgage rates have remained stubbornly high, UK price growth has primarily been driven by equity-rich, needs-driven buyers over the last year, which explains why demand for houses has been stronger than flats.
“Flat buyers tend to be younger and renting is a more common alternative on the initial rungs of the property ladder.
“Stretched affordability has also been a concern for those with less equity, with flats often located in higher-value urban centres, which have also been less in demand as people continue to recalibrate their work/life balance since the pandemic.”
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