When examining the subject of annual house price inflation, the emphasis is all too often on regionality, without sufficient account for the variations that exists across different property types.
Since 2020, average prices for larger properties have grown at almost twice the rate of smaller homes, with detached properties, specifically, having increased by 24% (meanwhile, flats have gone up by 12% on average.)
These shifts have been driven by the changes in buyer demand brought on, mainly, by the pandemic’s ‘race for space’ and Stamp Duty cuts.
Before this unprecedented series of events, in early 2020, flats were witnessing the highest rate of annual price inflation (4.1% vs 1.7% for detached properties.)
What happened next, sufficed to flip the script on ‘micro-living,’ and transform the shape of the UK property market…perhaps irreversibly.
Between January 2020 and December 2022, the average price of a detached home rose by more than 25.9% (equivalent of £93,345,) and property prices in rural areas rose 11% more than those in urban areas
This surge in demand for larger homes created a higher entry point for these types of properties, and even though we have since witnessed a return to a more ‘normal’ market, the effects of this period can still be felt, not least in the 25% higher premiums these properties typically command now, compared to at the start of 2020.
While it would be easy to weigh these statistics against the forecasted ‘softening’ of house prices next year, the reality is that even a 10% drop in prices wouldn’t suffice to bring larger homes back to their pre-pandemic prices (they would still typically be around £50,000 more.)
In addition, with house price inflation expected to pick up again by 2024, there is a risk to up-sizers and ‘second-steppers' that the ‘wait and see’ approach being universally prescribed in the media, could actually nudge all hope of an onward move, just outside the realms of affordability.
For more details on the current property market, please contact Braxton on 01628 674234 or email property@braxtons.co.uk.