Property price growth – apartments race ahead of the rest

Property price growth – apartments race ahead of the rest

Online estate agent Tepilo looks at which type of property is seeing prices rising fastest throughout the UK.

The type of home you are selling could have an impact on how much it sells for, with semi-detached and detached properties generally commanding the highest prices, while terraced homes, flats, apartments and bungalows are typically more affordable.

New research, though, will make good reading for those looking to sell an apartment. Data from high-street bank Halifax has revealed that prices for apartments are rising faster than any other property type. Over the past five years the average UK apartment has grown in value by £1,251 per month, equivalent to a rise of more than £75,000 during this time span.

The increasing importance of apartments

Despite apartments accounting for only 15% of all property sales, they are increasingly important to urban labour markets – with apartments often at their most prevalent and popular in major towns and cities where space is at more of a premium.

The Halifax data backs this up, with an increase of 48% in apartment values between 2013 and 2018, highlighting the growing popularity of this property type. By contrast, there was an increase of 42% for terraced houses and 27% for detached homes in the same time period.

Strong demand despite outside challenges

Regional city centres have witnessed a sustained level of demand for apartments, even in spite of the uncertainty caused by the ongoing Brexit negotiations.

Apartments prove popular among both investors and owner-occupiers – for homeowners, an apartment is generally more affordable than a detached or semi-detached home and a good return on investment is likely in the long-term, while for investors they produce solid returns in the form of excellent capital gains. Regional city centres, with their robust labour markets and dynamic local economies, are attractive to both would-be buyers and investors, so sellers in these areas – particularly sellers of apartments – should be met with high demand.

Home values on the up

Halifax’s latest House Price Index revealed that house prices rose by 1.5% during May, following a slight wobble in April. Low interest rates and the strong performance of the labour market are two reasons behind this growth.

“The continuing strength of the labour market is supporting house prices,” Russell Galley, managing director at Halifax, said.  

“In the three months to March the number of full-time employees increased by 202,000, the biggest rise in three years.”

Additionally, pay growth is edging up after years of stagnation and consumer price inflation is falling. As a consequence, the squeeze on real earnings has finally started to ease, which has encouraged more people to think about buying a home. With interest rates still at very low levels (0.5%), paying back on a mortgage is more affordable than it has been for years – and is, in many cases, cheaper than renting – which is providing a further boost to demand and house prices.

Demand expected to grow

By the middle of 2029, the UK’s population is anticipated to exceed 70 million. What’s more, urbanisation has been increasing steadily in recent years (up from 80.2% in 2006 to 82.84% in 2016, according to Statista) and this trend is expected to continue for the foreseeable future.

With these two things in mind, demand for city centre apartments looks set to remain strong in the years ahead. This, coupled with the fact that prices for apartments are rising faster than any other kind of property type, makes for excellent news for sellers who are bringing this kind of home to market.

If you are selling an apartment, you should feel confident that demand will be high and that your chances of selling for your asking price or above will be good. Conditions for sellers are currently very strong, and even though activity typically slows down during the summer months – as many people head abroad for some sun – there is still a good argument for listing your home as the longer days and better weather allow you to shine the best possible light on your property.

Whether you are selling an apartment, a bungalow or a detached house, demand should be high. As long as you market your property effectively, advertise heavily online, carry out viewings in a friendly, professional manner and work closely with buyers – and your agent – to build a mutually beneficial relationship, your chances of pushing through a sale in a quick, stress-free manner will inevitably increase.