The value of Britain’s detached properties has increased by an average of £642 per month over the past decade, the largest increase in cash terms compared to other property types; according to new research from the Halifax.
Since the second quarter of 2002, the average price of a detached property has grown by almost £77,000 (or 38%) to £282,211 today.
Over the past 10 years, the average price of terraced houses has grown by 41% to £151,568. The average price of both semis and bungalows has grown by 37% (to £165,565 and £185,365 respectively).
However, since the start of the financial crisis in 2007, bungalows have outperformed all other property types. In the past five years, the average price of a bungalow has fallen by 19% to £185,365. This compares with a 21% decline in the average price of a detached property and a 24% fall in the price of semis. Terraced houses (-28%) and flats (-25%) have been the worst performers.
Terraced houses and flats recorded the largest price falls in recent years as these property types are very popular with first-time buyers. Terraces and flats combined accounted for 63% of all first-time buyer purchases in the first half of 2012.
In contrast, during the five years before the crisis (2002-2007) both terraces (£1,710 per month or 96%) and flats (£1,420 per month or 65%) recorded larger price rises. Circumstances for first-time buyers were easier at this time with a much greater availability of high loan to value mortgages.
The average price of a detached house is now £117,000 (70%) higher than that for a semi-detached home; a gap that has widened from 66% at the height of the housing market in mid 2007.
Similarly, percentage differences in prices between detached properties and terraces and flats have also widened. The average price for a detached home is 86% higher than for a terraced house compared with 71% five years ago. In 2012, the average price of a detached house is 75% higher than for a flat; five years ago they were 67% higher.
“Prices of all property types have fallen over the past five years with the biggest declines for flats and terraced homes,” said Martin Ellis, housing economist at Halifax.
“These types are particularly popular with first-time buyers and their sharper price falls probably reflect the difficulties that those looking to enter the market for the first time have been facing. The prices of those property types which are less reliant on first-time buyers, such as bungalows and detached homes, have been more resilient.
“One benefit of the decline in prices has been that flats and terraced houses can now typically be bought for less than £100,000 in some parts of the country. This is a far cry from five years ago when little was available below this price.”