Savvy property investors and developers make it their business to keep an eye on the market and adapt their strategies to account for the latest market trends. With this in mind, new research revealing the latest top property type could be invaluable to help them make informed decisions.
We take a look at the data-driven findings that bring to light the top-performing property types of the year so far…
The rise of detached properties
The average property has seen an increase of 1.4 per cent in its value and is now commanding a price of £295 per square foot. However, not all properties were created equal in this respect.
According to the research, which analysed data for the first six months of this year and compared it to the same period in 2022, detached properties are the front-runners thus far in 2023. Priced at an admirable £337 per square foot, detached properties not only clinch the top spot in terms of value but have also enjoyed 4.3 per cent annual growth. These homes have increasingly found favour among homeowners and investors due to the extra space they offer for the UK’s growing group of remote and hybrid workers. Their dominance is further reflected when looking at freehold properties, where detached homes boast a price of £340 per square foot, representing an annual rise of 4.6 per cent.
Semi-detached properties making strides
Trailing closely behind, are semi-detached properties, which have secured a notable rise of 2.5 per cent this year, positioning them firmly as the second-best option for those looking to invest. Interestingly, when we look at the data for leasehold homes, semi-detached properties really shine with a 4.3 per cent growth, indicating their growing popularity among long-term leaseholders.
Terraced properties: the steady player
Terraced homes, a popular choice for property investors for several years, have seen a modest growth of 0.8 per cent this year. While this may seem unremarkable compared to their detached and semi-detached counterparts, they still present a stable option for those looking to make a safe bet in the property game.
For this property type leasehold properties saw the largest growth at 2.9 per cent growth versus freehold terraced properties at 0.8 per cent.
Flats: a surprising turn
Flats, traditionally a favourite for urban dwellers and developers alike, have taken an unexpected turn. Although they remain lucrative at £335 per square foot, they have experienced a slight dip in value by 1.2 per cent year on year.
Interestingly, when it comes to the analysis of freehold properties, flats have enjoyed the second-highest increase in the last year. The average value of a freehold flat increased by 3.7 per cent in the last year to £277 per square foot compared to a fall of 0.9 per cent for leaseholds.
Mitchell Fasanya, Co-founder and CEO of Searchland, which conducted the research, commented on the evolving landscape: “Our latest data release may make for worrying reading for the nation’s housebuilders, as not only are flats the most common property type to bring to market, but the vast majority will be leasehold.
Of course, while a marginal reduction in value per square foot is far from ideal when it comes to maximising profit margins, it’s important to remember that a far greater number of flats can be delivered in a single plot versus the space required to build a development of detached and semi-detached homes.
So, while flats may have taken a knock where topline values are concerned, they are likely to remain the most profitable endeavour for the nation’s housebuilders to pursue.”
The changing face of the UK’s leading property type indicates that the industry is not just about bricks and mortar; it reflects societal evolution, economic trends and individual aspirations, and, as such, will continue to keep property investors on their toes for years to come!