Searchland, a source for property market data, recently took a magnifying glass to the average price per square foot for different property types in the first half of this year. By comparing these figures with the same time frame in 2022, we can gain valuable insights into the shifts in property values.

On the whole, the average property has seen a price rise, with the current value at £295 per square foot, marking a modest 1.4% uptick from the previous year. However, not all property types have performed uniformly.

Breaking Down by Property Type

• Detached Homes: Topping the charts in both value and growth, detached homes are currently priced at £337 per square foot, reflecting an impressive annual jump of 4.3%.
• Semi-detached Homes: Not too far behind, semi-detached homes have witnessed a 2.5% growth, taking the silver spot in terms of value rise.
• Terraced Homes: These properties have experienced a relatively smaller increment, growing by 0.8% over the last year.
• Flats: The outliers in this data set, flats have seen a dip of 1.2% in value, year on year. Nevertheless, priced at £335 per square foot, they remain a potentially profitable venture for property developers.

A Closer Look: Leasehold Properties

Focusing solely on leasehold homes provides an even clearer picture:

• Flats: Despite the overall drop in value, when it comes to leasehold properties alone, flats still command the highest price at £337 per square foot, albeit with a 0.9% reduction.
• Semi-detached Leasehold Homes: These properties are the stars in terms of growth rate, having risen by a robust 4.3% over the past year.

Freehold Properties: Where Do Flats Stand?

It’s interesting to note that in the realm of freehold properties, the story for flats is quite different:

• Flats: In a surprising twist, freehold flats have seen the second-largest surge in value, growing by 3.7% to reach £277 per square foot.
• Detached Homes: Yet again, detached homes steal the show. With a value of £340 per square foot, they have experienced a growth rate of 4.6% annually.

What Does This Mean for the Builders?

Mitchell Fasanya, the Co-founder and CEO of Searchland, pointed out that while the data might raise eyebrows, especially considering that flats — predominantly leasehold — are the most popular property type developed, the bigger picture should not be ignored.

He explains, “A slight dip in value per square foot might seem disconcerting from a profit-making standpoint. However, it’s crucial to understand the capacity factor. The space required to develop a series of flats is considerably less compared to detached or semi-detached homes. So, even if flats have experienced a setback in terms of value, in volume, they are likely to be a more profitable venture for builders.”

Wrapping Up

In conclusion, while detached homes clearly dominate the market in terms of value growth, flats — particularly freehold flats — shouldn’t be dismissed. Their potential for profit, especially in terms of volume, is something developers and investors should keep in mind.