Demand to buy flats is dwindling compared to houses, the government’s house price index for England shows.
Flats are 1.4% cheaper than a year ago, averaging at £129,000, data from August (the latest) shows.
In contrast semi-detached house prices have risen by 3.8% to £212,000, detached and terraced homes also rose by 1.3% and 2% respectively.
Jonathan Hopper, chief executive of Garrington Property Finders, said: “The north-south divide has been joined by another schism in the property market – house and flat prices are heading in opposite directions.
“This is a tough time to be selling a flat. Months of stagnating prices have turned into falls.
“Rather than running out of steam, the property market is being reshaped.”
In terms of regional differences, London saw the lowest monthly price rose of 0.1%, where prices average at £566,000.
At the other end of the spectrum prices rose by 6.6% in the North East year-on-year, bringing them to £164,000.
Looking at England overall, home prices increased by 2.9% annually.
Emma Cox, managing director of real estate at Shawbrook, said: “House prices edged upwards in August by 3%
YoY driven by the usual summer uptick, a more competitive mortgage market, and an increase in available stock. I
“Improved buyer sentiment, supported by a more settled interest rate horizon, has also helped sustain activity in recent months.
“While conditions remain challenging for professional landlords, ongoing affordability pressures continue to steer many prospective buyers towards the rental market.
“This is creating opportunities for landlords to meet resilient demand and expand their portfolios. It’s vital that government recognises the important role private landlords play as a bridge into homeownership for many.
“However, with speculation around new property taxes ahead of the November Budget, many are proceeding with caution.
“Combined with the typical seasonal slowdown as we approach the end of the year, these factors could influence price movements in the months ahead.”