The average price of a UK flat has shot up 32 per cent since 2004 – more than double the rate of increase in average price for all other property types, according to Halifax.
While the average price for a flat has grown from £157,172 in 2004 to £208,169 today, the average for all other property types has risen just 15 per cent in the same period, from £186,478 to £214,450.
Halifax says much of the rise in average flat prices is attributed to London, where property prices are highest and flats represent a high proportion of the market.
Outside of London, terraced homes have risen fastest in five out of 12 regions: North West, Yorkshire & The Humber, West Midlands, East Midlands and East Anglia. The average price of a terraced house increased from £149,067 in the second quarter of 2004 to £183,738 in the second quarter of 2014.
Terraced houses and flats were the hardest hit in the housing market downturn between 2007 and 2009, dropping 33 per cent and 32 per cent respectively. Terraced properties fell from £209,917 to £140,690 over the period, while the average flat price dropped from £215,439 to £146,024 in that time.
Detached homes have experienced the smallest growth of all property types during the last decade, rising 12 per cent from £284,449 to £318,264.
Halifax says these property types experienced the sharpest fall in prices because they are most popular amongst first-time buyers, who were hardest hit as the availability of mortgage finance tightened in the crisis.
Halifax housing economist Martin Ellis says: “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 have underperformed flats and terraces. The demand for such properties has been partly constrained by a widespread lack of equity amongst owners who bought for the first time around the peak of the market. Many of these homeowners are still finding it difficult to finance a move to a larger home.”