On The Market
revealed this week that the average price of upsizing from a two-bedroom to three-bedroom house costs approximately £68,376, or a 29% increase.
This varies across the UK, with the South West costing 36% (equivalent to £79,895) to upgrade to a three-bed home, compared to inner London where there is only a 10% difference in price.
Upsizing is part of the natural cycle of the housing market, with lifestyle changes, growing families or the search for more space sparking the need for a bigger home. On the Market’s research focuses primarily on houses, with a move from two-bed to three-bed.
However, when you take into account the number of first time buyers choosing ‘starter homes’ that are flats, studios or apartments, upsizing is a bigger picture. The move from a two-bed to a three-bed could be for any number of reasons; another child on the way, a family member moving in, the need for a guest room if moving further away from friends.
The move from a one-bedroom flat was almost always inevitable.
With first time buyers often struggling save a deposit and get a foot on the ladder, that starter home is about growing equity. The ‘first time sellers’ or ‘second steppers’ trying to move on from those homes may find a nasty surprise in store, depending on their region.
First (and even second) time buyers can become stuck for longer in a home they’ve outgrown simply because they can’t afford to upsize.
Our data shows that the top regions for upsizing are London, Scotland and Northern Ireland, followed by the East Midlands and Yorkshire and the Humber.
This isn’t much of a surprise. With the difference in London only being 10% for an extra room according to OTM and prices generally being so much higher, once buyers have a London home, moving up isn’t a huge problem.
The other areas seem to have a different root – house prices in general are lower, so whilst the increase might still be around 25%, it’s likely to be more affordable for those who have built up equity in their home.
It’s also worth considering where these properties become available – whilst upsizers are comfortably increasing their space in the above areas, we found the majority of those downsizing were doing so in Wales, the South West and the East of England.
This data can give an indication as to where people are moving to have families, get more space or just finding what they can afford. It can also tell us about the time of life of some of these areas. Many buyers know that their extra space comes at a premium but knowing where to get the most bang for their buck can ensure they get a great deal.