Demand in the UK residential property market has shifted from larger homes towards flats due to a combination of supply shortfalls, increasing urbanisation, and the progressing stability of the recovery enhancing the preference for apartments across key cities. 

The initial shock of Covid-19, ensuing lockdowns and the emergence of working from home led to a race for space characterised by both buyers and tenants seeking out larger properties in suburban leafier locations. As cultural, commercial, and retail amenities have opened up - alongside vaccination and booster uptake reaching advanced levels - there is a market shift towards urban centre cities, especially in neighbourhoods with easier access to entertainment and retail hubs. 

As a result, the house price growth for flats overtook that of detached properties, according to the latest Halifax house price index for November. Apartments experienced a 10.8 per cent jump in an annual appreciation relative to 6.6 per cent for detached properties; a marked reversal from trends through the early parts of the pandemic. Overall, the average UK home grew 8.2 per cent over the course of the year to £272,992 whilst in London this reached £512,129.

UK home values are now at a 15-year high, according to Halifax, supported by strong UK employment and a competitive mortgage lending environment. The latest ONS data reveals that the number of paid employees increased by a record 257,000 in November to  reach 29.4 million. Moreover, the unemployment rate fell once more, to 4.2 per cent in the three months to October.

Across the spectrum of property types, this trend is expanding with a rejuvenated market for luxury apartments. Knight Frank data indicates that demand during the first half of the pandemic leaned heavily in favour of detached housing to the extent of 85 per cent. However, between July and September, this has reversed such that rental demand is 45 per cent, composed of a desire for apartments.