Editor's note: This brief was summarised by The Property AI Newsroom from a report by PropertyWire. Read the original article for full details.

Flat Market Recovery Seen as Crucial for UK Housing Growth

Restoring buyer confidence in flats is critical to revitalising the UK housing market, according to Andy Hill, CEO of Hill Group. Flats have historically served as entry points for first-time buyers but have lost appeal in recent years.

Hill highlighted that flats were once considered stepping stones for first-time buyers, but many now seek small houses further out instead. Data from Zoopla shows that since 2016, house prices have increased by 43%, while flat prices have risen by just 10% over the same period.

Hill attributed the decline in flat popularity to fire safety concerns following the Grenfell tragedy and dissatisfaction with the leasehold system. He also noted that product quality must improve to meet changing buyer expectations.

The Hill Group has responded to these challenges by implementing design changes, including ensuring that all new flats have their own personal outside space—a lesson learned from the Covid pandemic.

The flat market’s underperformance stands in contrast to the broader UK housing market, which has shown resilience despite economic challenges. The build to rent sector has attracted £2.2 billion in investment during the second quarter, indicating continued institutional interest in apartment developments.

The recovery of the flat market could have significant implications for housing delivery targets, especially in urban areas where higher-density development is necessary. Restoring confidence in apartment living is seen as important for maintaining first-time buyer access to homeownership.