The best and worst types of property to own

Barely a week ever passes without some form of pronouncement on the state of house prices across the nation. From Halifax to Hometrack, Rightmove to Nationwide, we are never short of data on what’s really happening to the value of our homes.

It would be lovely if they gave a consistent message. However, as they all rely on different models, you’ll get months when one claims house prices have risen while another argues they have fallen. Even when the indices agree on which direction house prices have moved in, there’ll be disagreements about the size of the change, and even how much they reckon the average home is worth.

Comparing apples and oranges

However, the real problem with house price indices is that they only ever tell half the story. Sure, they may say the average house price rose by 1%, or fell by 2%, but even if that's true, there will be plenty of areas across the UK where that wasn’t the case, streets and towns that saw house prices shoot up.

My father is an estate agent in a very popular area of North London, and the simple fact is that so many people want to live there, even when the rest of the country is reporting falls, chances are prices there are, at worst, stagnant.

Moral of the story: when it comes to house prices, never rely on a single, sweeping national statistic. But then again, most of us already knew that.

The type of property

What many of us often discount is that, like the regional variances in house prices, there can also be very wide variances in the shifts in prices of different types of property.

So just because inner-city apartments are falling dramatically in price, we should not assume the same is true for a semi-detached suburban property - after all, the buyers (and therefore the markets) for these properties are very different.

Thankfully, Halifax is looking to redress the balance, and recently published a far more detailed index looking at how the various different property types have performed over the past decade. And it makes for very interesting reading.

Value up by £91 a day!

Related blog post

• John Fitzsimons writes:

  Should you use an estate agent?

  When the time comes to sell your property, should you rely on an estate agent or do it yourself?

  Read this post

If you own a detached property, then over the past year you have enjoyed some pretty sizeable gains. According to Halifax’s research, the average price of a detached family home has risen by more than any other property type over the last 12 months.

Over that time, the average property price has increased by 13% from £266,050 to £299,295. That’s the equivalent of £91 a day, a pretty sterling performance in anyone’s book, certainly when you consider that other types of property have seen average growth of 8-9%.

So while detached properties have clearly seen some impressive growth in the past year, all of the various property groups have staged a decent recovery following the credit crunch.

Top performer of the decade

However, in terms of longer-term performance, it’s semi-detached properties which have performed the best. In the past decade, these properties have seen their value rise by a frankly incredible 111%, slightly ahead of terraced properties (110%) and bungalows (109%).

Indeed, flats were the only types of property not to see their value double over the past decade.

The table is extraordinary really, emphasising just how astonishing the housing bubble was. It also demonstrates just how mediocre the ‘crash’ was, perhaps adding weight to the arguments of those house price sceptics who remain convinced that a second crash is inevitable.

With base rate due to rise, increased unemployment due to Governmental cuts, and tax increases on the horizon, the signs are there to suggest property demand, and therefore house prices, will be heading south, no matter whether you own a flat or a detached property.

Then again, a house price crash has been ‘inevitable’ for some time now, and yet it never quite happens. Perhaps property really is impervious to financial logic. What do you think? Let us know your thoughts using the comments box below.

Getting the money right

Whether you want to buy a maisonette or a detached mansion, just as important as getting a decent price is getting the right finance in place. While many of the big-name lenders are still somewhat reticent at the prospect of lending at decent rates, some of the less well-known lenders like Yorkshire Building Society are constantly launching fantastic, competitive new deals.

Here’s just a selection of some of the best mortgages around at the moment.