Why are 3-4 bedroom homes at record prices?
Posted on Thursday, October 1, 2020
Needing more space has always been the most popular reason for moving house, but now we’re seeing asking prices for bigger homes at an all-time high.
We’ve previously written about a growing trend of home-movers looking for larger homes this year, and our data analysts can reveal that this demand is driving prices up.
Second-stepper homes, i.e. three- or four-bed properties, have seen average asking prices soar to a record of £291,618 this month.
Our research tells us that this has been fuelled by buyers looking for more space, including both those who need extra space for their families and those looking for room to work from home.
The demand for bigger properties is also reflected in the number of homes finding buyers compared to this time last year.
The strongest sector is ’top of the ladder’, which includes four-bed detached homes and larger. The number of sales being agreed, compared with the same period last year, more than doubled in August in this sector, up by 104%.
While in the second-stepper sector (three- or four-bed homes excluding four-bed detached) they were up by 55%. The first-time-buyer sector of two bedrooms or fewer, although not as strong as the larger homes sectors, still saw sales agreed up by 36%.
Overall prices have remained steady since they hit a record in July, up by a marginal 0.2% on the month, and up by 5% annually, which is the highest annual growth rate recorded since September 2016.
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What do the experts say?
Rightmove’s property data expert Tim Bannister explained that there’s lots of competition for bigger homes right now, so only serious offers will be considered by sellers.
He said: “Increased competition for second-stepper homes has pushed prices to a record this month for those looking to take the next step up the ladder.
“Needing more space has always been the most popular reason for moving house, but now there’s a new urgency for extra space to be able to work from home, which means that there are different sets of buyers competing for the same type of property.
“At the start of the year a fourth bedroom was very much a luxury for buyers trading up, but it’s now emerging as a must-have for those who are able to take that step.
“With overall asking prices just a few hundred pounds shy of July’s record, and buyer demand at an all-time high, those currently looking for their next home are likely to find that only offers close to the asking price will be considered, especially for larger homes.”