Demand for larger homes has driven UK property price growth in the past year, according to research from Halifax.
Research found that annual property price growth reached 3.7% in January 2025, compared to just 1.0% at the start of 2024.
The average cost increased by £10,431, bringing it to £294,818 and surpassing the previous peak in August 2022.
Terraced houses led the growth with a 4.5% increase, reaching £235,296, while detached properties rose by 4.1% to £471,748.
In contrast, flats saw the slowest growth at 3.2%, averaging £168,569, while semi-detached houses grew by 3.8%, with an average price of £307,685.
Additionally, flats experienced fluctuating price growth last year, peaking at 4.7% in October before settling at 3.2%.
The North East recorded the strongest growth in flat prices, rising by 15.1% to £100,123, while the East Midlands saw a slight decline of 0.6%.
Terraced homes peaked at 5.7% growth in October 2024 and began 2025 with a 4.5% increase, with the North East seeing the biggest annual increase at 8.4%.
Meanwhile, semi-detached houses grew by 3.8%, with Northern Ireland experiencing the highest increase at 7.0%.
Detached houses saw a 4.1% increase, with Northern Ireland recording the strongest growth at 15.2%.
The average price for first-time buyers rose by 3.2%, with flats accounting for 27% of first-time buyer purchases, varying from 71% in London to just 4% in the East Midlands.
New build flats bucked the trend, showing a higher growth rate of 6.7%, with buyers paying a significant premium.
Amanda Bryden, head of Halifax mortgages, said: “The fortunes of different property types tend to ebb and flow depending on broader market conditions.
“This time last year, the average price of a flat had risen more quickly than a detached house, as buyers adjusted to higher borrowing costs and sought to compensate by targeting smaller properties.
“Now, as interest rates have started to ease, it’s once again those homes offering more space which are fuelling demand.”
Bryden added: “And that’s not just a short-term trend; over the last decade, bigger properties have tended to outperform smaller homes when it comes to price growth.
“This has caused the gap between the rungs on the housing ladder to widen further, presenting a bigger challenge to those looking to make the step up.
“However, that only tells part of the story. Slower growth among smaller homes is helpful for first-time buyers, and we saw a big rebound in that market last year, with a fifth more stepping onto the ladder.”
She said: “If you look beyond the UK picture to the individual nations and regions, there’s huge variance in average price performance for different property types, with many areas offering more value for money.”
