The UK’s housing market is experiencing a significant shift, with the price of flats surging as workers return to the office and mortgage costs jump. According to data from Halifax, the cost of buying a flat has been increasing at a faster rate than for bigger properties. In the year to February, the average price of a flat rose by 2.7 per cent, while the prices for semi-detached and detached homes increased by 1.7 per cent and 2 per cent respectively.
This trend is largely driven by the return of workers to the office, with four in 10 UK workers now back in the office full-time, according to a study from Virgin Media. As a result, there is a growing demand for flats in big cities, pushing up prices.
“As interest rates have stabilised and buyers adjust to the new economic reality of owning a home, one way to compensate for higher borrowing costs is to target smaller properties.” - Amanda Bryden, head of Halifax Mortgages
The findings also highlight the challenges faced by policymakers in balancing the need to improve energy efficiency in rental properties with the need to avoid disrupting the rental market. The government’s previous proposals to introduce stricter energy efficiency standards for rental properties were scrapped, but the issue remains a pressing concern.
“The challenge for a new government is how to address these issues without causing huge disruption to a rental market already under strain.” - [Author’s name]
The Renters Reform Bill, which returns to the House of Commons next week, aims to address some of these issues by abolishing Section 21 ’no fault’ evictions and tightening rules around landlord repossessions. However, the bill has faced opposition from some Conservative MPs, who argue that it is biased in favour of tenants.
“Tenants should rightly be empowered to hold rogue and criminal landlords to account to root out the minority who bring the sector into disrepute. However, it is vital that the majority of responsible landlords have confidence in the Bill to provide the homes for rent the country needs.” - Ben Beadle, National Residential Landlords Association chief executive
As the UK’s housing market continues to evolve, it is clear that policymakers must balance competing demands and find solutions that work for both landlords and tenants.
Image: UK Housing Market
