For other property types, price inflation, while still strong, was half that of flats with detached homes and bungalows growing by 12% and 13% respectively. Terraced houses fared better with a 10-year growth rate of 23%.
The rapid increase in the price tag on flats is being driven up by the London market where this type of home represents a high proportion of the property market. But across the country demand from fledgling buyers for an affordable first home has also increased demand for flats and terraced houses, driving up prices.
However, outside London, the price of a flat or terraced house is well within the reach of many first-time buyers.
A typical flat currently costs less than £100,000 in the East Midlands and between £100,000 and £110,000 in the North, Yorkshire and the Humber and West Midlands.
The average price of a terraced home is below £120,000 in the North, North West, Yorkshire and the Humber and Wales. Whilst London has by far the highest average price for flats, at £328,800, flats are the least expensive of all property types in the capital.
Martin Ellis, housing economist at Halifax, said: “There has been a significant increase in the number of first-time buyers since 2010 compared with a modest decline in the number of those moving home. This difference is reflected in a bigger rise in prices over the past five years for those property types that are most popular with first-time buyers: flats and terraces.
“Since 2009, larger property types – such as detached homes, semis and bungalows – have underperformed flats and terraces. The demand for such properties has been partly constrained by a widespread lack of equity amongst homeowners who bought for the first time around the peak in the market. Many of these homeowners are still finding it difficult to finance a move to a larger home.”