Flat Vs House Prices In Your Area

[worried1]

Has anyone started to notice the gap widening between flat and house prices in their area? Is this something that you would expect to continue as the crash gathers pace?

Here is an example in my area:

924sqft flat for £299,950:

http://www.findaproperty.com/displayprop.aspx?edid=00&salerent=0&pid=7426498

786 sqft house two roads away for £499,950:

http://www.findaproperty.com/displayprop.aspx?edid=00&salerent=0&pid=7921585

Ok, so the flat may need £25k spent on it to 'spruce it up' a bit, and the house has a tiny private garden, but is there really just this much difference in value?

I can understand the value of not having neighbours living above/below you, but surely you get quite a bit of noise in these older terraced houses anyway?

[Kyoto]

In cities such as Birmingham, Leeds, Manchester, flats are definetly leading the way down.

That's where all of the repos are, and having been following those markets, sellers are willing to negotiate there too.

I think they will diverge more before houses follow. There are so many flats and with the **** falling out of the BTL and FTB markets, I don't see where the price support will come from. Realistic yields are still very poor.

Edited December 23, 2010 by Kyoto

[Pauly_Boy]

Yeah, I see similar here too!

PS, how on earth can people afford those prices?

[tim123]

Has anyone started to notice the gap widening between flat and house prices in their area? Is this something that you would expect to continue as the crash gathers pace?

Here is an example in my area:

924sqft flat for £299,950:

http://www.findaproperty.com/displayprop.aspx?edid=00&salerent=0&pid=7426498

What an awful layout for such a large space

[DannyT]

What an awful layout for such a large space

I fail to see how a 2 bed flat can possibly justify £300k . Just because it's Surrey I suppose ? I live in Leavesden just outside Watford - 5 mins from the M25 , 10 mins from the M1 , 15 mins into Euston from Watford Junction - and on top , Warner Bros are building their massive European headquarters on the doorstep (with B.T and other huge multinationals here too - oh and one of Brtiains top golf resorts The Grove just down the road ) . A 2 bed here the same size is £170k . Is a surrey postcode really worth an extra £130k !?!?

[koala_bear]

Has anyone started to notice the gap widening between flat and house prices in their area? Is this something that you would expect to continue as the crash gathers pace?

You're not the only one to have noticed, I raised the same point in another Topic on a slightly different subject 2 days ago:

In H1 '09 many of the residential developers announced that they would be switching focus from flats to larger houses, that decision will have taken time to run through which may explain the change in figures as a change in the mix. Because the mix has changed to more expensive properties the initial list price will be higher.

Local anecdote (S.London) non-new-build: the initial listing price of <2 bed (i.e. flats) has fallen over the last 6 months, 3 bed (house and flats) have remained flat and >4 bed have risen.

So if the house builders have focused on bigger properties (movers (with equity for deposits?) rather than FTBs) they will be more likely to get away with a high list price if the anecdote holds true for new build as well.

The BBA figures this morning also pointed to new lending increasingly being focused on movers rather than FTBs i.e. lack of buyers is hitting flats (FTB) harder than houses (movers) at the moment as the movers have move equity/deposit prior lending history and probably not a liar loan or nequity at the moment. The banks are lending to the least risky as they are buying houses there is more price support for houses.

If the price of the houses starts to fall the indices will take a real hammering has the rise of house prices has been counteracting the fall of flat price. The price of houses will probably be knocked by many of the proposals in the MMR i.e. no liar loans, affordability on repayment rather than IO, 25 year term assessment...

Some of the lenders have started to implement some of the changes voiluntarily (some of it is visible in the BBA figures, when one bank has changed criteria over the last couple of months)

Edited December 23, 2010 by koala_bear

[Snugglybear]

1. In most modern flats you can hear your neighbours in any direction fart, never mind anything else. In a house at least you only share a wall with two neighbours at most , and often only one, even on estates of flimsy modern boxes.

2. Houses are mostly freehold, so no leasehold worries (may not be true in London, but who the hell can afford to buy there anyway).

3. Flats have service charges over which you have very little control. For a laugh I went to see a development in Cardiff - where even the hot water and heating were provided centrally, so it's not in your power to reduce those costs if you should need to economize.

No wonder people will pay a premium for houses.

[Riedquat]

In some places flats sprung up like mushrooms during the boom. Coupled with their lesser desriability, and the fact that loads of them never sold anyway, it's not a surprise that they're would start dropping fastest.

[MrPin]

I'm still seeing flats advertised, at the price that would buy a house!

But they are on the way down!

[Mrs Bear]

Has anyone started to notice the gap widening between flat and house prices in their area? Is this something that you would expect to continue as the crash gathers pace?

Here is an example in my area:

924sqft flat for £299,950:

http://www.findaproperty.com/displayprop.aspx?edid=00&salerent=0&pid=7426498

786 sqft house two roads away for £499,950:

http://www.findaproperty.com/displayprop.aspx?edid=00&salerent=0&pid=7921585

Ok, so the flat may need £25k spent on it to 'spruce it up' a bit, and the house has a tiny private garden, but is there really just this much difference in value?

I can understand the value of not having neighbours living above/below you, but surely you get quite a bit of noise in these older terraced houses anyway?

Partly a question of 'period' vs. boxy, boring, characterless block, I expect. Any 'period' cottage in a large area around there carries a large and often ridiculous premium. There are minute period cottages in Richmond - and I do mean minute - maybe with 2 beds but really only fit for one person - that sell for not far off £500K.

Plus I should imagine that the ground floor location of the flat is a minus from a security POV - that's a busy area and ground floor bedrooms mean that even in a sweltering summer (OK, hard to imagine now but we do get them in the SE) you can't have bedroom windows open at night. And for most people a garden or any outside space, however small, is always a plus.

Should imagine a similar sized flat in that area on a higher floor and with a balcony would go (or try to go) for rather more.

[the flying pig]

i'm not really seeing this round my way in SW london. many flats' asking prices seem way above peak selling prices. there's been a spate of going well OTT on renovations with a view to achieving a pwemium price.

[worried1]

I fail to see how a 2 bed flat can possibly justify £300k . Just because it's Surrey I suppose ? I live in Leavesden just outside Watford - 5 mins from the M25 , 10 mins from the M1 , 15 mins into Euston from Watford Junction - and on top , Warner Bros are building their massive European headquarters on the doorstep (with B.T and other huge multinationals here too - oh and one of Brtiains top golf resorts The Grove just down the road ) . A 2 bed here the same size is £170k . Is a surrey postcode really worth an extra £130k !?!?

I am not sure it is the postcode making the difference. This flat is in KT6 and you can buy 2 bed flats for well under £200k (asking price) within the same postcode. This flat is in arguably the best part of the postcode as it is right on the Thames with a 7-8 minute walk to the mainline station and less than 15 to a major town centre. On the downside it is on a massive road, but flats of this size that are set back a bit tend to have even higher asking prices.

[worried1]

1. In most modern flats you can hear your neighbours in any direction fart, never mind anything else. In a house at least you only share a wall with two neighbours at most , and often only one, even on estates of flimsy modern boxes.

2. Houses are mostly freehold, so no leasehold worries (may not be true in London, but who the hell can afford to buy there anyway).

3. Flats have service charges over which you have very little control. For a laugh I went to see a development in Cardiff - where even the hot water and heating were provided centrally, so it's not in your power to reduce those costs if you should need to economize.

No wonder people will pay a premium for houses.

All true, and I would always expect a big premium on houses, but this seems too big. The flat is £325 per sqft is the house is £636, so almost exactly double!

[tim123]

I am not sure it is the postcode making the difference. This flat is in KT6 and you can buy 2 bed flats for well under £200k (asking price) within the same postcode. This flat is in arguably the best part of the postcode as it is right on the Thames with a 7-8 minute walk to the mainline station and less than 15 to a major town centre. On the downside it is on a massive road, but flats of this size that are set back a bit tend to have even higher asking prices.

There is a huge difference in pricing between parts of KT6.

River roads in Kingston are 100 times more desirable than the slum heap that is Tolworth

tim