Due to a slowing property market, apartment prices across the UK have plummeted over the year, with some areas experiencing drops of more than 7%, presenting first-time buyers (FTBs) with an opportunity to get on the property ladder, new research from Gatehouse Bank has revealed.
The figures from Land Registry found that between Q4 2017 and Q4 2018, apartment prices in Aberdeen fell by 7.5%, with the average price now at £115,159, the largest drop in apartment prices recorded over the year.
Following behind was St Albans, where prices have fallen by 5.3% to £294,852, and Middlesbrough, which has seen a decrease of 4.6% taking the average price to £68,898.
According to the bank, retreating prices are likely to be linked to government schemes that support FTBs, combined with falling demand from landlords. The help to buy scheme and stamp duty land tax relief has effectively “boosted the budgets” of FTBs who can therefore stretch themselves to larger properties.
However, apartment transactions have dropped 20.6% in the past two years, falling from 196,273 in 2016 to 155,801 in 2018. Over the same period, sales of semi-detached homes fell by just 1.1% to 247,853.
Gatehouse studied Land Registry data on the price of semi-detached houses and apartments in 108 major local authority areas across the UK and found that the price of apartments is falling in 33 of these areas, although on average apartment prices are still growing at a rate of 0.95% a year. This is nearly four times slower than the 3.39% annual growth being recorded for semi-detached houses.
In 22 of the areas, the price of apartments is falling, while the cost of semi-detached houses continues to rise.
Commenting, Gatehouse Bank CEO Charles Haresnape said: “Affordability is a significant issue for those looking to take their first step on the housing ladder, so our research provides some positive new for those struggling to find their first home.
“Flats appear to have fallen from favour to a degree over the last year, but some buyers are inevitably going to take advantage of this opportunity.
“Our research shows that the value proposition of flats in these areas is changing far more rapidly than it is for larger properties and this is likely to prove tempting to many prospective purchasers in the coming months.”
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