Rising mortgage rates spark demand for smaller properties

Rising mortgage rates spark demand for smaller properties Rising mortgage rates and the cost of living crisis have led to a surge in demand for smaller properties, particularly flats. The share of first-time buyers seeking two-bedroom flats has increased to 20%, while the demand for three-bedroom houses has dropped to 40%. Flats have lagged behind houses in terms of price growth due to the search for space during the pandemic and concerns over cladding and leasehold charges. However, experts expect demand for flats to increase as buyers seek better value for money. The rising interest in flats is also driven by downsizers, rising living costs, and the appeal of urban areas. Overseas buyers are also taking advantage of discounts in London's central areas. In some areas, flat values are now increasing faster than house values. 

The Daily Telegraph (17/07/2023)