State of the housing market sees demand soar for terraced homes

The average price of a terraced property has increased 68.4 per cent to £151,332 in the 10 years to the second quarter of 2011, said the Halifax.

This equates to a rise of £118 a week and outstrips a 52.8 per cent rise in the cost of the average home to £177,740.

Demand for terraces has been strong because they are the most affordable type of property, while more expensive detached homes have seen their share of sales drop, the report revealed.

Despite recent price hikes, a terraced home is 45 per cent cheaper than an average detached home, which costs £273,173.

Halifax housing economist Suren Thiru said: “Although all property types have recorded significant price increases overall during the past decade, terraced homes have seen the biggest growth.

“Demand for such properties is likely to have been supported by their relatively favourable levels of affordability over the period. The rapid house price rises during much of the 2000s priced many potential home movers out of the upper end of the UK housing market.”

Terraced properties saw their share of all house sales rise by more than any other property over the decade, increasing to 34 per cent from 31 per cent. Detached homes were the only type of property to see a drop in their share of sales, declining to 14 per cent from 21 per cent, driven by a large drop in demand from home movers.

Terraced properties accounted for the biggest price rise in eight of the 11 regions.

Scotland and the Yorkshire and Humber region accounted for the biggest price rises across all property types over the decade, while London saw the smallest gains.