The UK housing market boom has been driven by a surge in buyer demand for detached properties during the pandemic, according to new research from Halifax.
The analysis, based on data from the Halifax House Price Index and conducted in partnership with IHS Markit, found that the cost of detached properties in the UK has risen at almost twice the rate than for flats.
Looking at changes in property prices since March 2020 through to the end of 2021, the average cost of a detached home in the UK reached £425,177 in December 2021, an increase of around 17% or £60,556 in cash terms.
This compares to an increase of around 9% for a typical flat since March 2020, with prices rising by £13,325 up to an average of £158,992.
Terraced houses rose by £27,715 (+15%) to an average of £213,798, while semi-detached properties increased by £36,841 (also +15%) to an average of £280,090 over the same period.
Table 1: UK house prices by property type
Mind the property gap
Perhaps one of the biggest impacts on the property market has been the widening of the gaps between each type of home.
Flat owners can now expect to spend an extra £54,806 to upsize into a typical terraced house (compared to £40,416 in March 2020).
Those currently in a terraced property need a further £66,292 to own a semi-detached home (compared to £57,166 in March 2020).
But home movers hoping to switch from a semi-detached to a detached house need an additional £145,087 (compared to £121,371 in March 2020).
A similar pattern emerged across the regions, with detached home prices typically growing by more than the average.
Table 2: Region house price change by type
Wales and the North West saw the greatest increase in detached home prices, up 24.4% and 21.9% respectively. The most expensive detached residences are in London, at an average £910,568, where their rate of increase (+12.4%) was almost double the average of all property types in the capital.
Russell Galley, Managing Director, Halifax, said: “Record numbers of moves have been taking place throughout the pandemic, with the demand for detached homes now greater than for any other property type, meaning the competition for those looking to buy an often larger property is fierce.
“As employers began to crystalise longer-term plans for home and hybrid working, buyers have been able to consider homes further afield as the need to commute falls away, with properties previously considered too remote now giving families extras like garden rooms and home offices. This trend means Wales, with its beautiful countryside and lower relative property prices, saw the strongest growth in detached homes over the past two years.”