Between 2019 and 2022, London houses beat flats by about 13 percentage points on price per square metre. Larger homes beat smaller ones by a similar margin, and outer London beat the centre. All three happened at once, and they are tangled together: houses are bigger, and there are more of them in outer London. The interesting question is which of these buyers were actually paying for. Hold the others constant and the answer is clear. The premium for a house over a flat of the same size rose from about 15% to over 20% during the pandemic, and it has kept rising.
Start with the raw prices. Houses rose +18.8% per square metre from 2019 to 2022 against +5.5% for flats. Homes of 100 square metres and over rose +18.2% against +5.0% for those under 60. Outer London rose +14.6% against +8.2% for the central postal districts. Expressed as gaps, all three open up through the pandemic.
Looking at any one of these lines alone, you cannot tell whether buyers wanted houses, wanted space, or wanted to leave the centre, because each of those shows up in all three lines. The model has a factor for each of the three, and holding the other two constant is what separates them.
One factor stands out. The premium for a house over a flat of the same floor area, in the same district and of the same age and energy rating, averaged 15.1% in 2015 to 2019. It jumped in 2021 and has kept climbing, averaging 22.3% across 2021 to 2025 and standing at 27.6% in the latest window. It is statistically significant in every rolling window since 2020. As a Factor Return, that is a gain of about 11% for a house against an otherwise identical flat, from the 2015 to 2019 average to today.
That is a premium for a different kind of home, not just a bigger one: a garden, a front door, rooms on different floors. In London it also means owning the freehold: 99% of freeholds sold are houses and 97% of leaseholds are flats, so tenure and dwelling type cannot be told apart, and this premium carries both. The pandemic made those things more valuable, and the market has kept paying for them.
Bigger homes usually cost less per square metre, so the size premium is a discount: a home with twice the floor area of an otherwise identical one sold for 6.2% less per square metre on average in 2015 to 2019. In 2021 to 2025 that discount all but disappeared, averaging 0.9%, and it is 2.0% today: a Factor Return of about +4.5% for the larger home. Space did become relatively more valuable, but the effect is small and statistically significant in only 63% of rolling windows since 2020.
Here demand and price move together. Across the last two decades, the share of sales that were large homes and the premium for size correlate at +0.72: when buyers reach for space, space gets dearer.
An outer-London home sells for less than an otherwise identical one in the central postal districts: 8.4% less on average in 2015 to 2019. That discount narrowed to 6.4% in 2021, the one year the pandemic drew buyers outwards, then widened again to 7.9% across 2022 to 2025. It is 7.5% today. Most of the raw outer-London outperformance is houses and space, which outer London simply has more of. Control for them and the move out of the centre was a one-year blip.
The pandemic did not just send buyers looking for more square metres or further out. It changed what kind of home they valued. A house now commands about 28% more per square metre than an otherwise identical flat, up from about 15% before the pandemic, and three years of higher interest rates have not undone it. For owners of flats, that is a relative loss that no headline index shows. For anyone comparing a flat with a house of the same size, the gap is now nearly twice what it was before the pandemic.
Every factor's Factor Return since 1995, and each factor's Factor Contribution to the constant-quality London Index.
Explore London Factors →Each Land Registry sale is matched to its own energy certificate by address (flat, house number and street within the postcode), taking the certificate nearest before the sale. The premiums come from rolling 3-month cross-sectional regressions of log price per square metre on location (a district-level price score, and outer London against the central postal districts), size, house versus flat (which carries tenure, since 99% of London freeholds are houses), construction era, energy rating and recent build. Each premium is quoted at a fixed, stated exposure, for example a house against a flat of the same size, so it moves only when the market reprices that characteristic. The Factors page shows every factor's Factor Return (the change in its premium at that fixed exposure), and the Trends page shows the constant-quality London Index and each factor's Factor Contribution to it.