Detached houses in London and the South East received a six-figure price boost over the course of the pandemic as buyers sought to accommodate their new lockdown lifestyles and make the most of stamp duty savings.
New analysis from Halifax shows it now costs £903,300 to buy a detached home in Greater London and £637,000 in the South East as increased working from home has continued to boost demand for larger properties with more outside space further from the inner city.
By contrast, London flat prices grew by just 3.8 per cent, just under £10,000 in three years, the weakest price rise of any property type across all regions.
Other UK regions to have seen detached house prices rise by more than £100,000 since January 2020 were the East of England, the South West and West Midlands.
The average cost of a UK home is now £286,500 after a rise of £48,600 over three years. Homes in the South East had the biggest cash value increase (£69,200) across property types since the beginning of the pandemic.
“People were leaving London long before the pandemic due to affordability pressures in the capital," said Tom Bill, head of UK residential research at Knight Frank.
"The pandemic turbo-charged this levelling-up process for UK house prices, although demand was initially skewed towards more picture-postcard locations and larger properties.
“Broadly speaking, more affordable parts of the country have seen stronger house price growth, closing the gap with London. As the gravitational pull of cities grows and buyers reassess their workplace/home balance, property prices in overlooked and far-flung parts of UK commuter belts will benefit."
Property forecasters predict house price price drops of between three and 12 per cent across London this year, after large increases over the last three years.
New figures published today suggest London sellers are knocking 5.5 per cent off asking prices in order to secure a sale — an average discount of £28,900 — while across the UK the discount is currently in the region of £14,100 (4.5 per cent of the asking price).
“The pandemic transformed the shape of the UK property market, and while some of those effects have faded over time, it’s important we don’t lose sight of the huge step change seen in average house prices," said Kim Kinnaird, Mortgages director at Halifax.
“Heightened demand created a much higher entry point for bigger properties right across the country, and that impact is still being felt today by both buyers and sellers, despite the market starting to slow overall.
“Taking detached houses as an example, average prices remain some 25 per cent higher than at the start of 2020. Even if those values were to fall by 10 per cent, they would still be around £50,000 more expensive than before the pandemic.”
