Demand for bigger homes driving house price growth - Halifax.

Source: Sharecast

The research, based on the Halifax house price index, showed terraced houses and detached properties had seen some of the strongest price growth over the last year.

Overall, UK property prices rose 3.7% in January, up from just 1% at the start of 2024.

Within that, however, Halifax said terraced homes had seen annual price growth of 4.5%, while detached houses reported a 4.1% improvement.

In contrast, flats had the slowest growth, with prices rising 3.2%, while the average cost of a semi-detached house rose 3.8%.

Amanda Bryden, head of Halifax Mortgages, said: "This time last year, the average price of a flat had risen more quickly than a detached house, as buyers adjusted to higher borrowing costs and sought to compensate by targeting smaller properties.

"Now, as interest rates have started to ease, it’s once again those homes offering more space which are fuelling demand. And that’s not just a short-term trend - over the last decade, bigger properties have tended to outperform smaller homes when it comes to price growth."

Flats account for around 27% of first-time buyer purchases in the UK, though that varies significantly by region. In the East Midlands, the figure is just 4%, but soars to 71% in the capital.