Demand for houses doubles as buyers search for more space

Demand for houses doubles as buyers search for more space

Whether you’re a first-time buyer or a homeowner looking to move up the housing ladder, here’s how the surge in popularity for houses could impact you.

Key takeaways

  • Interest in houses for sale has more than doubled as the pandemic drives buyers to search for more space.
  • The number of people looking to snap up a family house has soared by 114% compared with levels typically seen at this time of year between 2017 and 2019.
  • The average cost of a house has jumped by 7.3% during the past year, while the typical price of a flat has edged ahead by just 1.4%.

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.Download the full report

This has led to the average cost of a house jumping by 7.3% during the past year, while the typical price of a flat has edged ahead by just 1.4%.

Graph shows how the search for space is driving higher price growth for houses

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%.

Graph shows how price growth for houses is outstripping that for flats

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?

First-time buyers

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.

It’s worth remembering that there’s significant variation across the regions though. Price growth for flats is down 0.5% in London during the past 12 months, while it’s up 5.2% in Scotland.

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.

And remember that there are schemes available to help make buying your first home more affordable, such as first-time buyer stamp duty relief and Help to Buy.

Home-movers

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.

Source: www.zoopla.co.uk

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