FLATS are proving a more enticing option for those looking to buy a home, a leading property expert has said.
Amid growing concern about a looming crash in house prices, Jonathan Rolande says demand for flats is “holding steady”.
Mr Rolande, from the National Association of Property Buyers, said: “Things have turned on their head from the pandemic, when the ‘race for space’ led to prices rising and created an unexpected boom for the housing market.
“This rise through 2020 and into 2021 left flats behind to a large extent. Estate agents found that buyers favoured the more flexible accommodation of a house or bungalow instead. Lockdowns also created a sense of fear which drove demand for garden space.
“But that’s now changed. Increasing prices have pushed houses out of the picture for many, meaning they must now look at flats as a cheaper alternative.
“As the market shows signs of decline, many of those that wish to buy are opting for flats as a cheaper alternative to hedge against any drops in value. The ongoing issues with cladding also appear to have left the forefront of buyer’s minds.”
Meanwhile a report by Zoopla indicates demand from landlords for flats is also holding steady.
According to their most recent study, two-bedroom flats are increasingly the top property choice for tenants in the UK.
The latest Zoopla Rental Market Report for Q3 2022, found demand for this property type currently holds a 36% market share.
The data also revealed that rental costs across all property types have risen by 12.3% over the past 12 months, which the highest annual rise reported so far and a sign that the lack of rental homes available compared with the number of prospective tenants continues to affect the market.
Zoopla says that while the cost of living crisis in general could be encouraging some renters to seek smaller properties, soaring energy bills are also a factor.
The report also notes that the gas needed to heat a purpose-built flat is 40% less than that which is needed for a three-bedroom house, and this is something that the country’s tenants could increasingly be factoring in.
Zoopla’s report pinpoints particularly strong performance in city-based flats. It highlights the fact that urban areas have had average rental growth of 10.5% over the past year on average, compared with 8.5% in rural markets, indicating stronger city demand.
The jobs market is a major driver behind this “return” to the city, particularly as industries continue to recover post-Covid. Over the course of 2021 and 2022, Zoopla has discovered a rising trend towards more tenants seeking one and two-bedroom flats, while those seeking two and three-bedroom houses has diminished. The trend has been particularly apparent recently.
