The growth in the price of flats in the UK has dramatically outperformed that of detached houses by 42% in the last decade* as city centre living becomes the norm, says Lendy, one of Europe’s leading peer to peer secured property lending platforms.

The average price of detached and semi-detached properties grew just 19% and 18% respectively over the last ten years, compared to 27% growth in the price of flats (see chart below).

Lendy says urban regeneration projects, which began in the 1990s and have accelerated over the last ten years, mean growing numbers of people, including from overseas, now choose to live in city centres. This includes a small, but not insignificant number of High Net Worths living in luxury apartments.

Lendy adds that with considerable investment having been made in urban transport and infrastructure networks in some cities, many people now prefer to live closer to where they work, as well as cultural attractions.

To keep pace with strong demand, developers are building large numbers of new flat developments, frequently in former industrial areas. Canary Wharf and the South Bank are some of the most notable examples in London.

Liam Brooke, Co-Founder of Lendy, comments: “The decade’s revolution in city centre living is seeing flats in central areas become ever more popular, and prices have risen dramatically.

“Flats were once for people who couldn’t afford anything else, but that has all changed. Since the mid-90s the trend has been to live closer to the city centre, instead of out in the suburbs. Now, prices of houses in the suburbs are growing much more slowly.

“Many buyers are actively looking at areas that were formerly industrial sites close to the city centre, but have now been redeveloped with new residential complexes. New infrastructure projects such as Crossrail are often geared towards opening up new areas of city centres rather than the suburbs.

“The data suggests that the dream of a family home the suburbs has faded in popularity.

“This highlights how due diligence on property investments can reap rewards. Investors should consider avoiding too much exposure to residential property outside cities. Big social trends can have a huge impact on property prices.”

“With 83% of the UK population now living in urban areas, investors need to bear in mind significant social trends when considering what property to invest in.”