Halifax’s analysis has revealed that the price of apartments is increasing rapidly as affordability constraints put pressure on buyers to choose smaller properties.
Amanda Bryden, Head of Mortgages at Halifax, said: “Our recent research also found that buyers are adjusting their expectations, with first-time buyers in particular compensating for higher borrowing costs by targeting smaller properties. We see this reflected in property prices for the first few months of this year, with the value of flats rising most sharply, closing the ‘growth gap’ on bigger properties that’s existed for most of the last four years.”
The index also includes information from other sources. HMRC data shows that home sales increased in March 2024 by 1.4% on February’s figure (seasonally adjusted). Bank of England figures also show an increase in the number of mortgages approved for house purchases in March. It’s up by 1.4% monthly and 20.1% annually.
Bryden added: “If, as is still expected, downward moves in Bank Rate come into play later this year, fixed mortgage rates should fall. Combined with the resilience displayed by the housing market over recent months, we now expect property prices to rise modestly over the course of 2024.”
Further Reading: Is luxury real estate a good investment? Find out about this and other topics, such as how to buy a second property or finding a buy to let in London with our latest guides and insights.
