Race for space – Houses remain in much higher demand than flats

 Houses remain in much higher demand than flats

The pandemic and the shift towards flexible working have permanently changed what buyers look for in a home. Space is now a top priority, and demand for houses with gardens, extra bedrooms, and dedicated workspaces remains strong. As a result, houses are significantly more desirable than flats, leading to the widest-ever price gap between the two: the average house now costs 67% more than the average flat, the biggest difference in over 30 years.

Even first-time buyers, traditionally drawn to flats, are increasingly aiming for houses. In 2017, 44% of first-time buyers outside London were looking for three-bedroom houses—by the end of 2024, this had jumped to over 52%. Demand for smaller one and two-bed flats, meanwhile, has dropped as more buyers prefer the space and flexibility a house offers.

For sellers, this means well-presented houses in family-friendly locations can still attract strong offers. Flats, on the other hand, may require more competitive pricing or additional incentives to appeal to buyers.

Opportunities in the flats market

With demand skewed so heavily towards houses, flats are becoming a relative bargain in some areas. In several UK cities, owning a flat is now cheaper than renting one—monthly mortgage payments on a flat are, on average, 43% lower than the cost of renting it. This gap presents an opportunity for budget-conscious buyers who might be priced out of the house market.

Additionally, there’s been a surge in the number of flats being listed for sale. This is partly due to landlords offloading rental properties in response to tighter regulations and tax changes. As a result, flat buyers have more choice than ever, which could help shift demand slightly back in favour of apartments, particularly among investors or those seeking value in the market.

For buyers, flats may offer a chance to secure a more affordable home while still benefiting from central locations. For sellers, it may be necessary to price competitively or highlight features like low service charges, modern interiors, or strong rental potential to attract interest.