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Tuesday, September 23, 2014

Small properties see the best growth

The high cost of property means that people are increasingly accepting less space. This acceptance of less has lead to a relative increase in demand for smaller properties, more often flats by first time buyers or investors.

The situation has been compounded by the cost differential homeowners face in moving out to a larger property.

According to Halifax's latest data, the price of flats have outperformed other property types, with increases in their value of 32% during the past ten years, more than twice the 15% rise of the average property.

This strong performance can be partly be attributed to the over-heating in the London the market, where there is a predominance in the supply of flats.

Terraced houses have also performed well, in many other regions, due to their relative affordability. 

Martin Ellis, housing economist at Halifax, commented:

“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."

Read Halifax release on increases in flat prices

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