Should I buy flats or houses on Fairford Leys?

I was talking to an existing landlord earlier this week and he asked the above question. I gave my normal response- two bedroom houses on Fairford Leys give you the best of all worlds-minimum void periods, good rental return, sensible capital growth prospects, easy to resell when the time comes.
However I thought it was about time, as the market has moved so much this year, to check that my advice is still sound.
Taking a three month period in 2011 the average two bedroom house completion value was around £182,000. In the first three months of this year it was £190,000, growth of 4.4%.
Two bedroom flats in 2011 were £122,000 on average and in the first three months of this year the completion prices had only increased slightly to £125,000, 2.4%.
So if you have bought a house you have done marginally better than if you had bought a flat in % terms but when you translate in to pounds it sounds a little different... a return of £3,000 against a return of £8,000!
However if you look at the current market situation the picture is different again. Instead of using completion data look at the sales agreed and property available. Completion data available for the first quarter of this year will likely be for property sold around the last quarter of 2013 and although the market was picking up a little pace it had not heated to the levels we have seen in 2014.
As at 22/08/2014 Rightmove shows just two two bedroom houses available £207,500 and £199,950, while there are 19 sold subject to contract. There are twenty one two bedroom flats available with an average asking price of £157,000 and twelve indicated as being sold subject to contract.
If we assume from this that the houses are now averaging say £195,000 that is another £5,000 of growth-great news. But the growth for flats this year has been substantial with the lack of houses to feed demand many investors have turned to flats and they have been driven up in price. If we assume that with an average current asking price of £157,00 the average selling price historically this year has been at £145,000 that is a whopping £20,000 growth this year.
So do I need to change my advice? I still think the two bedroom houses on Fairford Leys tick all the boxes for a long term landlord but there are going to be short term gains to be had when supply is so thin on the ground as we have seen this year.
What impact do the rental returns have on this decision? Have they increased on both houses and flats? My next post will cover these questions...if you have other questions please email me ian@mortimersaylesbury.co.uk

Nala at home for the first time, just washed and fed.