A flat used to be the perfect option for first-time buyers and the first rung on the property ladder. However, according to the latest research from Halifax, the price of the average flat in the UK has risen by an eye-watering £51,000 since 2004, putting the prospect of homeownership into doubt for those yet to get onto the property ladder.
In 2004, the average flat in the UK cost around £157,172, but this has now soared to £208,168 today. Over the last 10 years, this is an increase of 32% in price, which is more than double the increase seen in all residential properties over the same period (15%).
Terraced homes, another refuge for the first-time buyer, have also seen a marked price increase; they are 23% more expensive now than they were in 2004. Tellingly, detached houses and bungalows, which rank the lowest on the first-time buyer wish list, have seen the smallest price rises (12% and 13% respectively). This suggests that it is first-time buyer demand that is driving prices skyward.
Martin Ellis, housing economist at Halifax, explains: "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."
Of course, while the average price of a flat may come as a shock, it must be remembered that the housing picture is a chequered one across the UK. London is once again the culprit, with flat prices in the Greater London area driving up the cost of the average flat.
Flats in London represent a large proportion of the housing market and the average price for a flat in this region now stands at the sky-high figure of £328,800. However, in the East Midlands, the picture is far more reasonable with an average price of £94,500, while in the North, Yorkshire and the Humber and West Midlands, flat prices average between £100,000 and £110,000. In fact, these regions have all seen the average price of flats fall over the 10-year period since 2004, with the East Midlands witnessing the biggest decrease of 19%.
In addition, it must be remembered that flats are only a fraction of the housing market, and they certainly aren't the most popular. In fact, semi-detached and terraced houses lead the popularity stakes overall, and semis are growing in popularity among first-time buyers as well, accounting for 29% of purchases so far this year.
While this property type has also seen price increases (15%), it hasn't been as steep as that witnessed for flats. So, while the average price of flats and terraced houses have undeniably sky-rocketed over the last 10 years, the news for first-time buyers isn't all bad.
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