In search of a spacious new home? You’re not the only one. Demand for houses has more than doubled as buyers search for more space in the wake of successive lockdowns.
Family houses are the most sought-after type of property, with the number of buyers looking to snap one up soaring by a whopping 114% compared with levels typically seen at this time of year between 2017 and 2019.
But while demand for all types of houses, from terraced to detached, has more than doubled, the number of buyers looking to purchase a flat has risen by only 34%, according to our latest House Price Index report.
In fact, price growth for houses has outstripped flats across all regions of the country
But the greatest disparity has been seen in Wales, where the cost of a house has risen by 10.2% year-on-year, while the price of a flat has edged up by just 0.9%.
Why is this happening?
On the one hand, demand for houses has been stoked by the stamp duty holiday, with bigger savings on offer for larger properties (typically houses).
But it also reflects a surge in buyer interest for more space, with successive lockdowns driving people to reassess their homes and lifestyles.
At the same time, the trend for working from home has prompted people to leave city centres in favour of more rural locations, which are more likely to consist of houses rather than flats.
What could it mean for you?
It could be good news if you’re a first-time buyer purchasing a flat rather than a house. The cost of flats has risen much more slowly than property values across the wider housing market during the past year.
If you're a first-time buyer eyeing a house, be prepared to face stiff competition. However, with no property to sell, you have an advantage over buyers in a property chain.
Soaring demand for houses means that if you are planning to sell a house, you could be in a good position to secure a quick sale.
You are likely to have seen it’s value rise during the past year too. Price growth for houses has been particularly strong in Wales and the north west, where it has jumped by 10.2% and 8.8% year-on-year respectively. It’s been weakest in London, where it has increased by 5.6%.
But if you are selling a flat, you may find the gap between the value of your current home and the house you want to purchase has widened in recent months.
Gráinne Gilmore, head of research at Zoopla, explained: “There is a continued drumbeat of demand for more space among buyers, both inside and outside, funnelling demand towards houses, resulting in stronger price growth for these properties. Sellers will need to consider this when it comes to pricing expectations.”
Regardless of the type of property you are selling, if you are looking to purchase a house, you are likely to face stiff competition from other buyers.
So it's important to do your homework and be prepared to move quickly when you find something you like.
How can Zoopla help?
Thinking of selling? Our My Home experience enables you to find out how much your existing property is likely to be worth, helping you to plan for your next purchase.
Looking for a new home? With competition intense, you can get ahead by registering with us to receive alerts whenever a property that meets your criteria is listed for sale. Our advanced search tools also help you find properties in your price range and area that are already listed.
Whether you are buying or selling, in the current fast-paced market, find a local estate agents to give you expert advice.
What’s the outlook?
While buyer demand for all property types has eased slightly, it remains up 80% compared with typical levels for this time of year.
But these high levels of demand are not being matched by the volume of homes on the market. And this means that buyer competition for houses is set to remain intense.
According to our research, house price growth for all property types is expected to hit 6% in the coming months.
But as the stamp duty holiday ends and economic conditions become more challenging, it’s set to fall back to between 4% and 5% by the end of the year.