● Price of flats has dropped as much as 7.5% in the last 12 months
● Aberdeen showing the biggest discounts followed by St Albans (5.3%) and Middlesbrough (4.6%)
● Across the UK, the price of flats is going up nearly four times slower than houses1
A cooling property market means flat values are plummeting by more than 7% in some areas in a boon for first-time buyers trying to buy their first home, research by home finance provider Gatehouse Bank reveals1.
Significant price falls in specific areas, including key commuter towns, are presenting first-time buyers with opportunities to get on the property ladder.
Land Registry data shows Aberdeen is offering the biggest discount year-on-year, with the price of flats in the Scottish city dropped annually by 7.5% in the last quarter1. The price of flats in St Albans decreased by 5.3% and in Middlesbrough they fell by 4.6%.
This table shows the annual change in the price of semi-detached houses vs flats in the last quarter (Q4 2018 vs Q4 2017):
Retreating prices are likely to be linked to government schemes supporting first-time buyers combined with falling demand from landlords. The Help To Buy scheme and Stamp Duty Land Tax relief have effectively boosted the budgets of first-time buyers who can afford to stretch themselves to larger properties.
Transactions of flats have dropped 20.6% in the past two years, falling from 196,273 in 2016 to 155,801 in 2018. Over the same period, sales of semi-detached homes fell only 1.1% to 247,8532.
Gatehouse studied Land Registry data on the price of semi-detached houses and flats in 108 major local authority areas across the UK.
It found that the price of flats is falling in 30.6% (33) of these areas, although on average flat prices are still growing at a rate of 0.95% a year. This is nearly four times slower than the 3.39% annual growth being recorded for semi-detached houses. In 22 areas (20.4%), the price of flats is falling while the cost of semi-detached houses continues to rise (see table below).
This table shows the areas where flat values are falling but the price of semi-detached houses continues to rise:
Charles Haresnape, CEO of Gatehouse Bank, said:
“Affordability is a significant issue for those looking to take their first step on the housing ladder, so our research provides some positive new for those struggling to find their first home. Flats appear to have fallen from favour to a degree over the last year, but some buyers are inevitably going to take advantage of this opportunity.
“Our research shows that the value proposition of flats in these areas is changing far more rapidly than it is for larger properties and this is likely to prove tempting to many prospective purchasers in the coming months.”
Notes to Editors:
1Land Registry: Q4 2018 vs Q4 2017, semi-detached houses vs flats and maisonettes