When buying property, one needs to look ahead to the future, especially if you’re aiming to upgrade to a bigger space in coming years.
By choosing a first home in a good neighbourhood that is likely to rise in value, you could see it sell for a higher price – and pocket the extra cash for your next property.
But it might still not be enough.
Rightmove has just revealed that those looking to take the next step on the property ladder by swapping their flat for a house will be facing an average cost of £68,000.
And that’s just outside London.
It’s not merely the location that will affect the property price, but also the size of the house you’re after.
Let’s break it down – and note all the figures below are averages, and based on an analysis of the asking prices for three million properties.
Three-bed houses have substantially increased in price compared to two-bedroom flats, meaning it will be much harder for buyers to trade up.
As an example, if you move from a two-bedroom flat to a three-bedroom house, you can expect to pay £67,761.
Meanwhile, if you want to add another bedroom (four in total) the figure can be as high as £183,093.
If you want to swap to four beds in London, not taking into account prime properties, you will need to fork out £338,820.
That’s right – the difference you would pay for upgrading one property to a house can be pretty much the same as buying a second flat elsewhere.
But, if you’re willing to look outside of the capital or consider less popular spots in the UK, you could save yourself a handsome sum.
In Swansea, for instance, you only need £11,000 to go from a two-bed flat to a three-bed, however compared to the posh Surrey countryside of Esher, this figure stands at £300,000 – so do your research first.
How much you would pay to upgrade – split by area in the UK
Here, you can see the average price of a trade-up across the UK, split by area and in two types: going from a two-bedroom flat to three-bedroom house and from three-bedroom house to four-bedroom house.
London (excluding prime properties)
£79,112 /£338,820
East Midlands
£70,733 / £150,749
East of England
£102,992 / £179,345
North East
£43,481 / £136,667
North West
£46,506 / £155,633
Scotland
£39,290 / £132,043
South East
£121,295 / £221,242
South West
£79,646 / £174,244
Wales
£43,772 / £148,184
West Midlands
£66,574 / £166,656
Yorkshire and the Humber
£39,259 / £145,309
Source: Rightmove
‘People who bought a smaller home five years ago and are now hoping to trade up will find it is harder to afford the next rung of the ladder because of the different pace of the sectors,’ said Tim Bannister, director of property data at Rightmove.
‘Those who really need the space and are struggling to trade up could widen their search area to find alternative places where they can get more for their money, or they may need to compromise on the type of home and opt for a terraced rather than detached.
‘The cash jump is even bigger from three to four beds, likely due to four-bed homes often having additional bathrooms, bigger gardens, garages or outbuildings, as well as an extra bedroom, but traditionally home owners stay in their second home longer, and so more people may have built up enough equity to make the jump to their forever home.’
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source https://metro.co.uk/2020/10/02/this-is-how-much-home-buyers-need-to-pay-to-trade-up-from-a-flat-to-a-house-13360375/
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