Are flats falling out of fashion?

The re-opening of the London market in May saw activity return to every corner of the capital, from Barking to Belgravia. However, sales of flats, in particular those with no outside space, have been slower to return to pre-pandemic levels.

While the average time to sell has dropped from over 150 days as the market emerged from lockdown to 34 in October, flats in the capital are taking around two and a half times as long to sell in comparison to houses. While historically there has never been much difference between the time it takes to sell a house and a flat, in October it took 29 days to sell a house in London compared to 70 days for a flat.

The shift in buyer preference since the onset of the covid-19 pandemic also means that flats now make up a smaller proportion of homes sold in the capital than at any other time in the last decade. So far in 2020, flats have accounted for 47% of all sales in the capital, the first time in a decade the number has fallen below 50% (in 2009 they made up 49%).

Breaking down 2020 by month, the impact of Covid induced decision making becomes clear. In July just 41% of completions in the capital were flats, the fourth month in a row the proportion has fallen. Figures for later months are not yet complete given the lag in recording sales. The last time flats accounted for a similar proportion of sales in a month was April 1996.

It hasn’t just been the capital which has seen a shift in buyer behaviour. Outside London, other large cities have seen flats make up a smaller proportion of homes sold. Although the drop off has been around half the levels seen in the capital. But in more suburban and rural areas, the share of flats sold remains precisely on par with last year’s levels.

How quickly buyer’s attitudes return to pre-pandemic norms is likely to depend on the path the pandemic takes over the coming months and the extent to which Covid has accelerated other underlying trends.