Larger homes have seen twice the price growth since pandemic
The study from Halifax looked into how the property market has shifted over the last three years. It found that average house prices have grown by 20.4% over the last three years, the equivalent of £48,620. That’s more than double the average growth of 7.8% in the preceding three years.
However, the increase was found to be more pronounced on larger homes. Before the pandemic, the rate of annual house price inflation for detached properties was “relatively sluggish” according to Halifax, at 1.7% compared with 4.1% for flats.
Yet between the start of 2020 and the end of 2022, the average price of a detached home rose by 25.9%.
This was in stark contrast with the 13.3% increase in the average price of flats over the same period, while semi-detached and terraced homes saw their values move by 23.1% and 21.1% respectively.
The areas that saw the biggest price increases
On a regional basis, Wales saw the strongest price growth of any area within the UK. Over the last three years, the average value of homes in Wales has risen by 29.3%, which in cash terms is £49,227.
In cash terms, the biggest jump was in the south east of England, where the 21.3% increase translates into a £69,224 rise.
Kim Kinnaird, mortgages director at Halifax, said that the pandemic had “transformed the shape” of the property market, and while some effects had faded over time, it was important not to lose sight of the “huge step change” seen in average house prices.
She continued: “Heightened demand created a much higher entry point for bigger properties right across the country, and that impact is still being felt today by both buyers and sellers, despite the market starting to slow overall.
“Taking detached houses as an example, average prices remain some 25% higher than at the start of 2020. Even if those values were to fall by 10 per cent, they would still be around £50,000 more expensive than before the pandemic.”