Aside from the stamp duty holiday, one big driver of the 2021 housing boom was the quest by buyers for more space inside and out.
But new figures from leading lender the Halifax reveal that the “race for space” may be slowing.
According to the bank’s housing market report for November, apartments were selling for 10.8% more last month than a year ago, compared to a 6.6% rise for the previously-sought after detached houses.
The trend is borne out by data from property portal Rightmove. Last November, detached homes were the website’s most searched for type of property. This year it was flats. Says Rightmove’s property data expert, Tim Bannister: “A shift in demand from bigger houses to flats has emerged as more of society has opened up again and people have assessed where they will work throughout the week, with many now considering a move closer to a city than further out.”
House prices may also have had an impact, with a percentage growth meaning a bigger increase the cost of a house compared to a flat - a rise no longer mitigated by the savings from the stamp duty holiday.
One other theory is that people who moved out of city centres during lockdown are now looking at second homes closer to the office. According to Sarah Coles of finance advice firm Hargreaves Lansdown: “When we think of second homes we might usually think of a cottage by the sea or in the countryside, but the pandemic has changed the way we live, and may well be affecting second home trends too.
“The growth of flexible and hybrid working means it makes more sense to buy a home where we really want to live, and a small place near work for when we absolutely have to go into the office.”
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