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Trusty terraces: Our love of these neighbourly homes is deepening

Terrace houses can be grand mansions or two-up two-down properties without pretensions. 

Yet, somehow these homes convey the same sense of solidity, whether they are in Belgravia, Bognor, by the sea, in a village, or in a market town.

These qualities are among the reasons for the deepening love affair with terrace houses in which one quarter of the population already lives, with more aspiring to join them.

Vibrant: A colourful row of terrace homes in London. The price of the average terrace has leapt by 8.2 per cent over the past year to £203,170

Vibrant: A colourful row of terrace homes in London. The price of the average terrace has leapt by 8.2 per cent over the past year to £203,170

Vibrant: A colourful row of terrace homes in London. The price of the average terrace has leapt by 8.2 per cent over the past year to £203,170

The price of the average terrace has leapt by 8.2 per cent over the past year to £203,170, thanks to the race for space and gardens that began in lockdown. 

But now it seems likely to become a permanent housing market trend. At a time when we have come to appreciate community, the terrace house embodies the neighbourly spirit, even if the thinness of the walls can mean that we know a little too much about the people living next door.

‘The pandemic altered the property landscape and the drumbeat of change is continuing, with buyers making decisions about how they want to live for the next five or ten years,’ says Gráinne Gilmore, head of research at the property portal Zoopla.

In fact, its latest figures show that houses are selling three times faster than flats, with buyers most eager to acquire properties with three bedrooms. 

The extension of the stamp duty holiday until the end of June has put such a home within the reach of a few more buyers.

It means the tax bill on a £600,000 three-bedroom Victorian terrace house is reduced from £20,000 to a less painful £5,000.

Once the tax break is withdrawn, the threshold or nil-rate band — the point at which stamp duty becomes payable — will be set at £250,000 until the end of September, meaning that there will be no tax on many terrace homes. Thereafter, the threshold returns to its usual level of £125,000.

What’s more, the Government’s new mortgage guarantee scheme launched this month, under which 95 per cent loans are available, may help more people attain the terrace dream.

Yorkshire Building Society is already offering 95 per cent loans outside the scheme to first-time buyers.

Aneisha Beveridge, head of research at Hamptons, the estate agency, points out that another reason for the passion for the terrace house is its affordability: ‘A terrace property costs 18 per cent, or £43,000 less than the average home in Britain — last year, close to a third of the homes that were sold in England and Wales were terraces, with this figure rising to 37 per cent in the North East.’

Only in London does a terrace home cost more than the average property, particularly since the pandemic has added to the allure of townhouses that surround a garden square, or are close to the urban oasis of one of the Royal parks.

A six-bedroom terrace house in Montpelier Square, Knightsbridge, a stone’s throw from Hyde Park, is on sale for £10.95 million, for example (knightfrank.co.uk).

Dating to the 1670s, row upon row of classically-inspired terrace houses began to be built in London as the destruction wrought by the Fire of London produced a call for better housing.

The perception that terraces in any location can be a good buy explains their attraction to buy-to-let investors.

‘Terraces are popular with landlords because these properties offer some of the best rental yield returns in the Midlands and the North,’ says Beveridge. 

‘Terrace homes can be more cost-effective long-term too since most don’t come with service charges and ground rents which can eat into returns.’

Right now, the shortage of properties for sale is constraining the ability of all househunters to acquire the terrace house dream. 

But estate agents believe that the vaccine roll-out and the stamp duty deadline should make many sellers more confident about moving, boosting supply.

On the market… Community spirit

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