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If you’re looking to sell an apartment in London, it’s time to ready yourself for some good news. New research from high street lender Halifax has revealed that prices for apartments are rising faster than for any other property type.
The average UK apartment has, over the past five years, seen a rise in value of £1,251 per month – equivalent to £75,074 over the last half a decade.
Even though apartments only account for 15% of all property sales, they are increasingly important – and prevalent – in major urban centres. The urban labour workforce relies heavily on apartments and flats – which tend to be more common in busy towns and cities where space is at more of a premium.
The rising demand for apartments is highlighted by Halifax’s data, which found an increase of 48% in apartment values between 2013 and 2018. By comparison, there was a rise of 42% for terraced homes and 27% for detached homes in the same time period.
City centres – and the outskirts of city centres where apartments are popular among young professionals and families looking to commute in for work – have experienced a sustained level of demand for a kind of accommodation that is perhaps most associated with contemporary, 21st century living.
Even in spite of Brexit uncertainty and political and economic concerns, demand has remained on the up for apartments. The solid labour markets and dynamic local economies of major cities – none more so than London and its outskirts – is continuing to entice buyers and investors. For buyers, apartments typically represent a more affordable type of home (and, thinking long-term, are likely to have a high resale value), while investors are attracted by the excellent returns on offer from apartments as a result of strong capital gains.
Sellers, therefore, have two potential target audiences to aim their home towards – investors and owner-occupiers – and you can be confident about demand remaining strong for the foreseeable future. The UK’s population is set to surpass 70 million by the middle of 2029, with much of this growth concentrated on London and its suburbs. This, coupled with increasing urbanisation (it rose steadily from 80.2% in 2006 to 82.84% in 2016, according to Statista, and is expected to continue on an upward curve), is expected to increase the demand for houses to a higher level than ever before.
With apartment prices rising faster than any other property type, if you happen to be selling a home of this kind you should feel confident of both high demand and a good price being achieved. Demand remains high for all types of homes, with conditions still working in favour of sellers as low interest rates and mortgage affordability encourage more people to move up the ladder or buy their first home.
Recent research also revealed that first-time buyers are better off owning than renting. The findings from Santander Mortgages showed that first-time buyers would have lower monthly outgoings if they bought a property rather than renting one in every region of the UK. The incentive to buy instead of rent is at its greatest in London, where prospective first-time buyers could make the biggest monthly savings by switching from renting to home ownership, with average rents outdoing mortgage payments by more than £289 a month (or £3,468 a year).
House prices on the up
While the value of apartments is rising fastest, house prices across the board are on the up. According to the latest Halifax House Price Index, there was a monthly rise in home values of 1.5% during May. This followed a slight wobble in April.
Halifax says two of the reasons behind this growth are the labour market’s strong performance and low interest rates. The number of full-time employees rose by 202,000 in the three months to March, the biggest increase in three years. The strength of the labour market is helping to support house prices, as is the fact that inflation is falling and pay growth is edging up slightly – both of which have started to ease the squeeze on real earnings.
As stated above, demand is being encouraged by low interest rates and mortgage affordability, which is also helping to keep prices high as supply struggles to keep pace with those looking to buy a home.
All in all, then, the picture is currently positive for all types of sellers – but none more so than sellers of apartments. As ever, to give yourself the best chance of selling, you need to make sure your home looks the part – clean, welcoming and attractive – and you should work closely with an experienced agent to ensure your property is seen by as wide an audience as possible.
For guidance on selling a property in North London, East London, Hertfordshire or Essex, contact your local Kings Group branch today.To find out much your home could be worth in the current marketplace, you can request a free instant online valuation.