Home offices became must-haves during the pandemic and even now that restrictions have ended, many people are choosing to work from home at least a day or two a week. While in the past buyers would move up the housing ladder to gain extra bedrooms, they are now increasingly doing so in order to accommodate a dedicated office space as well.
The cost of gaining an extra room in England and Wales depends on the size of property and the location in which you’re buying. On average, the price jump in percentage terms is largest when going from a three-bedroom home costing an average of £292,460 to a four-bedroom property costing an average of £473,620.
This 62% price leap reflects the cost of gaining the additional bedroom itself, but also the extra living space which often comes with it (and is before any stamp duty or moving expenses are factored in). The average four-bedroom home is 50% bigger than the average three-bed because it has extra living, dining and bathroom space alongside the additional bedroom. This is what accounts for the significant price gap.
On average, it’s costlier to trade up from a one to two bed in the South of England, while the move between three and four beds tends to be the most expensive leap in northern areas of England and in Wales. In the North East, for example, a four-bedder costs an average of £122,300, or 81%, more. This is due to two main reasons. First, households making this move in the north are 50% more likely to be upsizing from a semi-detached to a detached home than those moving down south. And, second, properties further north typically offer a third more living space for every additional bedroom than homes down south.
Meanwhile further South, it is costlier to move from a one-bedroom to a two-bedroom home. In the South East, a two-bedroom home costs an average of £285,590 – this is £96,440, or 51%, more expensive than a one-bedroom home. For example, in the coastal district of Arun in West Sussex, the average three-bed costs 96% or £146,150 more than the average one-bedroom home.
Trading up from a one-bedroom to a two-bedroom property might mean simply gaining an extra room. However, as buyers scale the housing ladder to gain extra bedrooms, the property they move to typically has more living and outside space too.
For those looking to move from a two to three bed home, London is the costliest place to do it. The average three-bed costs an average of £174,880, or 42%, more than a two-bed. In Kensington & Chelsea, the costliest place to buy property in the UK, a buyer would have to spend almost £1m, or 81%, more to buy a three-bedroom home costing an average of £2,187,960.
On the flip side, the cost of gaining an extra room is minimal in some places. In Manchester, a one-bedroom home costs an average of £167,740 and getting another bedroom would cost an average of only £6,490, or 4%, more. In Liverpool, buyers pay an average of £302,960 for a five-bedroom house, only £4,810, or 2%, more than a house with four bedrooms.
A permanent shift towards more home working is likely to mean more demand for larger homes. Money that would have previously been spent on commuting costs will continue flowing into the housing market. Homeowners who previously wouldn’t have been looking to upsize may now well choose too anyway.
At the other end of the spectrum, more time spent working from home, even on a part time basis, may prove to be a drag on downsizing as people decide to hang onto their spare room for a few more years. And in the middle are people who haven’t moved during the pandemic but will still look for something different when they do. This desire for space is likely to continue to provide significant support to the housing market in the future.
