Average price for flat rose £1,000 a month since financial crash

The average price of a flat in the UK has increased at a rate of £1,000 a month since the financial crisis, driven by a steep rise in the cost of buying in London, according to figures from the country’s biggest mortgage lender.

Since the property market reached a low in late 2008 as the credit crisis took hold, the average price of a flat has risen by £86,474 to £237,223, Halifax said.

The 57% increase is significantly higher than the 37% rise across all property types, and means that on average buyers are paying £16,978 more for a flat than a semi-detached house.

However, once London is stripped out of the figures the picture is very different: price growth for both terraced houses and semis is higher and flats are on average the cheapest types of homes to buy, at £157,401.

The London property market has many more flats than the rest of the country, according to Halifax’s analysis of its house price database. Half of sales in London are flats, compared with 17% of those throughout the UK.

In recent months there have been signs that the market in luxury flats is cooling, with developers in some parts of the capital reporting slowing sales, driven in parts by higher stamp duty rates for homes over £937,500.

However separate figures from the Office for National Statistics (ONS) show that in the 12 months until the end of last September, flats accounted for the biggest proportion of new-build properties selling for more than £1m. Of 1,306 sales of £1m-plus new-build homes in England and Wales, 804 were apartments or maisonettes. Of these, 759 were in London.

Martin Ellis, housing economist at Halifax, said: “The high prices being paid for London flats have had a significant impact on the national picture when it comes to property-type winners and losers. This is the result of more flats being sold in the capital and at the higher end of the market.

“Such is their popularity that flats continued to outperform other property types in the capital last year, with an annual price growth of 17% by the end of 2015.”

The ONS figures show that Kensington and Chelsea had the highest proportion of properties selling for at least £1m in the year ending September 2015, at 57%. It was followed by Westminster, where the figure was 42%.

ONS figures showed 57% of properties sold in Kensington and Chelsea in the year to September 2015 cost at least £1m. Photograph: Rex

Online estate agency Housesimple said there were now only nine London boroughs where it was possible to buy a home for less than the average house price of £191,812, reported by the Land Registry for England and Wales.

It looked at listings on property website Zoopla to determine how much buyers would need to get on the housing ladder in each of the capital’s 32 boroughs.

It said the cheapest property being advertised for sale was a studio flat in Bexley, on the market for £94,995. In contrast, in the east London borough of Tower Hamlets there were no homes currently listed for less than £250,000.

Alex Gosling, chief executive of Housesimple, said the figures highlighted “how desperate the plight is for ordinary Londoners on average salaries”.

He added: “Although this research reveals there are properties for sale below the UK’s average house price, the pickings are extremely slim and you’re getting very little square footage for your money. It’s a studio or nothing in many boroughs.”

Hometrack’s latest monthly index of city house prices showed a “notable and unseasonal acceleration” in price inflation in February, with the annual rate of growth at an 18-month high of 11%.

Portsmouth, Nottingham and Birmingham each recorded their highest rate of annual inflation for more than 10 years while Leeds and Glasgow saw the biggest year-on-year increases in more than eight years.

The index showed that in both London and Cambridge prices are up by about 50% since the previous market peak in 2007.

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