Did you know, house prices rose at twice the rate of flats in 2020?

The demand for property in 2020, following COVID-19 and the impact of lockdowns, has soared as people seek their own safe space. As a result, house prices rose at twice the rate of flats.

British residents are becoming tired of lockdowns and being in the same four walls all day long. They want a space where they feel motivated, energised and safe as we still travel through the rest of the COVID-19 pandemic. The previous year has shown us exactly what we love and hate about the place we live in. There hasn’t been a more enlightening time for many of us, and as a result, we are seeking alternative arrangements where we can finally make a house feel like a home.

Richard Donnell, director of research for Zoopla, said that “the search for space has been a key feature of the rebound in market activity as households re-evaluate their housing requirements. Demand for family homes with gardens, parking and extra space to work from home has continued to rise.”

However, this hasn’t brought good times for everybody. Property investors and developers face rising house prices as a result of this increased demand. Annual property price growth for houses in the UK is currently running at 4.3%, while price growth for flats is just 1.8%, according to Zoopla’s House Price Index. This increase is seen across the whole country, with every region reporting more significant gains in the value of houses in comparison to flats.

So why exactly is this happening?

The COVID-19 pandemic has triggered what many are calling a ‘once-in-a-lifetime reassessment of housing’. Lockdowns, social distancing and other restrictions have all caused people a spike in desire for a home which gives us both outdoor space and room for a home office. With lockdowns showing many businesses that they can operate remotely – and save some costs as a result – many people will continue to work from the comfort of their home than the office in the future. And being unable to leave home as regularly as we would have liked has shown a need for our own private outdoor space. Zoopla’s advanced search property tool has indicated that ‘garden’ was the top feature buyers were looking for, with ‘detached’, ‘rural’ and ‘secluded’ also included in the top 10 searches.

So, as demand for these types of homes outweighs the supply, prices are pushed up, while flats are in less demand than they were before the pandemic. This current trend could make it harder for sellers looking to sell their flat and trade up to a house. With flats being less desired, it can and may be hard for sellers in the coming months to find buyers and a purchase price they like. Anyone buying a home in the near future will also face competition with other home buyers, leading to prices surging.

To look at more statistics, the high level of transactions and increased housing demand has contributed to a 26% rise in property value in 2020. Sales also rose by £62 billion in this year alone, to a total of £300 billion. As we move through the start of 2021, this demand is expected to continue for at least the first six months.

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