The latest research from Searchland, the development site sourcing specialists, has shown that while many developers may have their sights firmly fixed on the development of apartment blocks, they are the only property type to have seen a decline in value on an annual basis.
Searchland’s data analysed the price per sq foot of each property type during the first six months of this year and how this compares to the same period in 2022.
The figures show that, overall, the average property has commanded £295 per square foot so far this year, a 1.4% increase versus last year.
That said, when breaking the data down by type of property, price performance does differ quite drastically.
At £337 per square foot, detached homes not only command the highest price in the current market, but they’ve seen the largest annual increase, up 4.3% in the last year. Semi-detached homes rank second in this respect with an increase of 2.5%, followed by terraced homes (+0.8%)
Flats, however, have seen a reduction of -1.2% in value year on year, although at £335 per square foot, they remain the second most lucrative endeavour for developers.
When breaking the data down even further, this time looking at leasehold homes only, flats remain the only property type to have seen a decline, down -0.9% in the last year. Although, again, they command a strong price at market, the most of any other leasehold property type at £337 per square foot.
In fact, it’s semi-detached leasehold homes that have seen the strongest growth, up 4.3% in the last year.
Interestingly, when it comes to Searchland’s analysis of freehold homes, flats have enjoyed the second highest increase in the last year. The average value of a freehold flat has increased by 3.7% in the last year, now at £277 per square foot.
However, when it comes to the best performing freehold property, it’s detached homes that reign supreme again, commanding the strongest market values at £340 per square foot and having seen the largest annual increase at 4.6%.
Co-founder and CEO of Searchland, Mitchell Fasanya said, “Our latest data release may make for worrying reading for the nation’s housebuilders, as not only are flats the most common property type to bring to market, but the vast majority will be leasehold.
Of course, while a marginal reduction in value per square foot is far from ideal when it comes to maximising profit margins, it’s important to remember that a far greater number of flats can be delivered in a single plot versus the space required to build a development of detached and semi-detached homes.
So while flats may have taken a knock where topline values are concerned, they are likely to remain the most profitable endeavour for the nation’s housebuilders to pursue.”
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