Houses v Apartments

Ever wondered whether houses or apartments make the best property investment? In this blog, I will consider this very question.


Tenure

Usually, houses are Freehold. When they are leasehold they have a low ground rent and typically no service charge. Most of the time with a house it is your responsibility to maintain the grounds and the exterior of the house which comes with a cost.

Apartments are normally leasehold with around 150 years remaining. They also come with a ground rent and service charge. This will normally cover the maintenance of any outdoor facilities, the car park, the buildings exterior, corridors and other communal areas.


Capital growth

People often say "houses will always outperform apartments", but this is not always true. If we look over time the one which performs best is always changing. In the last 10 years, apartments have actually had more growth than houses. In the last 18 months (due to covid-19) people have been leaving city centre apartments for houses with more space and gardens. However, in the past 2 months with covid restrictions easing people have been going back to the city centre apartments. The capital growth of property has more to do with where the asset is located rather than whether it is a house or apartment.


Tenant profile

Houses are more likely to attract long-staying families. Apartments are likely to attract younger tenants. This is often but not always the case and depends on the development and the area.


To conclude both can be great assets. They do have some differences and one may suit your needs more than the other. You need to decide which asset is best for you.





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