Fervour for flats thanks to return to city working and ‘relatively modest’ price rises
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Demand for flats in London has hit its highest level for 19 months, as buyers looked to move closer to city offices.
Estate agents have said an influx of overseas buyers from Hong Kong thanks to new visa rules has driven interest.
The trend was revealed in Zoopla’s House Price Index, which found the average UK house price was £242,000, up from £216,500 at the start of 2020. Flats now average £175,700.
Agents have pointed to relatively modest price increases – two per cent for flats compared to nine per cent for houses – as pushing demand.
Demand for flats outside London has hit its highest level in five years, with “relatively modest” price hikes boosting the popularity of flats, according to Zoopla.
However, while city living is an attractive prospect for some buyers, the race for space has still continued to shape the market.
Demand for three-bed houses outside London is now four times higher than the five year average, with buyers taking a shine to the suburbs.
The most-sought after areas include Thurrock in Essex and Barking & Dagenham in East London, while the suburbs of Birmingham and Glasgow are also highly desired, Zoopla said.
Grainne Gilmore, head of research at Zoopla, said the market was being boosted by office-based workers “re-thinking where and how they are living” as well as demand flowing back to city centres as offices reopen.
She added: “Couple this trend with the return of international demand and the more modest prices rises in flats compared to houses over the last two years, and it’s clear why we are now seeing record-high spike in demand for flats outside London, and the highest rate of demand for flat in the capital than at any time since the end of the first lockdown.”