Terraced house prices rise by £118 per week

Sunday, 23rd October 2011

Buy to let landlords banked £118 a week from price increases of terraced houses over the past decade.
The value of terraced houses – the favourite purchase for property investors – outperformed every other type of home in the period.

They increased by 68.4 per cent, closely followed by bungalows at 67.8 per cent but streets ahead of average home values that went up by 53 per cent between 2001 and 2011, according to the Halifax.

Prices surged from £89,843 to £151,332 and despite the price increase, terraced houses are still the most affordable homes.

Prices are still 15 per cent less than the average house price of £177,740 and 45 per cent below the average detached home price of £273,173.

More terraced homes changed hands in the decade, rising from 31 per cent of the total in 2001 to 34 per cent in 2011.

Detached homes lost market share, falling from 21 per cent to 14 per cent, mainly due to the popularity of flats.

But the price of flats provided the worst returns for property investors during the study period – rising by 49 per cent, but well short of the 60 per cent plus price rises for houses and bungalows.

Since 2001, the number of flats built as a proportion of all homes in England was up from 20 per cent in 2001 to 50 per cent in 2009, but fell back to 35 per cent.

The drop in numbers is blamed on over supply in the buy to let boom years leading up to the credit crisis.

Suren Thiru, Halifax housing economist, said: “Although all property types have recorded significant price increases overall during the past decade, terraced homes have seen the biggest growth.

“Demand for such properties is likely to have been supported by their relatively favourable levels of affordability over the period. The rapid house price rises during much of the 2000s priced many potential home movers out of the upper end of the UK housing market.”