![](https://movinginnorfolk.co.uk/wp-content/themes/theme-movingin/assets/images/holding.jpg)
House prices growing fastest for small homes, says Halifax
Demand for homes on the lower rungs of the housing ladder is placing upward pressure on house prices, new research by Halifax has revealed.
The Bank’s findings, which have been based on its monthly House Price Index (HPI), showed UK prices had grown 1.9%, or £5,318, year-on-year as of February 2024. But within the data, flats and terraced homes saw their value increase faster than semi-detached and detached homes.
Flats saw the biggest jump in average value, rising 2.7%, or £4,290, to £163,016 compared to February 2023. Meanwhile, the slowest growth was recorded among semi-detached houses where average prices grew 1.7% (£4,797) to £295,199.
In the year to February, the average price of a flat increased by 2.7%, while the average terraced property value rose by 2.6%, Halifax said.
Prices for semi-detached and detached homes increased at lower rates, rising by 1.7% and 2.0% respectively.
Across Britain, Scotland saw the strongest growth in prices for flats over the past year, with a 5.9% increase, Halifax said.
Yorkshire and the Humber was the only English region to record a fall in prices for flats over the past year, with a decrease of 2.9%. The region also recorded the biggest increase in detached house prices over the past year, at 5.0%.
The north east of England, meanwhile, has seen the biggest percentage rise in the typical price of a terraced home, at 7.6%, as well as the biggest increase in the average price of a semi-detached home, at 5.9%.
In cash terms, detached homes increased by the most in price, by £8,853 on average in the year to February. The average price for a flat rose by £4,290.
The squeeze on mortgage affordability has had an impact on demand for housing, with smaller homes having recorded the strongest increases in price growth in the early part of this year, Halifax said.
Homebuyers have been adjusting their expectations to compensate for higher borrowing costs, as well as coping with the general cost-of-living squeeze, the bank suggested.
Amanda Bryden, head of Halifax Mortgages, commented: “As interest rates have stabilised and buyers adjust to the new economic reality of owning a home, one way to compensate for higher borrowing costs is to target smaller properties.
“This is especially true among first-time buyers, who have proven to be resilient over recent years, and now account for the largest proportion of homes purchased with a mortgage in almost 30 years.
“We see this reflected in property prices for the first few months of this year, with the value of flats rising most sharply, closing the ‘growth gap’ on bigger properties that’s existed for most of the last four years.”
Reflecting on the findings, Tom Bill, head of UK residential research at Knight Frank commented, “Not only do higher mortgage rates mean tighter budgets, demand for housing also becomes skewed towards needs-driven buyers. As a result, first-time buyers, growing families and people moving for work have driven demand in lower price brackets over the last year. Those in bigger properties or sitting on more housing equity tend to be more discretionary and some will be waiting for the appearance of more mortgages starting with a three.”
Nathan Emerson, CEO of Propertymark, added: “Whilst it is a positive sign for those hoping to sell their homes that property prices are rising, the market is still overwhelmingly expensive especially for first-time buyers who are adapting their property choices based on current prices. Propertymark’s own Housing Insight Report has demonstrated an 18% increase in new properties coming to the market, but with a year on year increase in population this will still not be enough. By focusing on the housebuilding targets the UK Government could provide more choice and meet surging demand.”
Original article from Property Industry Eye – Marc Da silva