If Londoners thought getting on the housing ladder was hard, trying to move up to the next rung is even more challenging. Our analysis reveals that the gap second steppers must bridge to move into a bigger home in the capital is now wider than ever.
With the average London semi-detached house costing £728,352, at a record 164% of the price of an average London flat, it’s no wonder it’s difficult for Londoners to trade up.
This ratio bottomed out at 127% in the summer of 2014 and, despite limited house-price growth in the capital since then, the disparity has widened significantly in both percentage and cash terms, making it harder than ever for second steppers to make the leap. In cash terms, the difference has soared from £99,600 to £283,000.
Newham, in east London, is the cheapest borough for a second stepper to trade up. Here, the average £526,045 cost of a semi-detached property is 148% of the average £355,042 flat. Assuming that a buyer has a healthy 25% equity in the property, selling up and buying a house would push up their mortgage payments by £626 a month to £1,927.
Indeed, it is generally in East and Southeast London where the jump up from a flat to a semi-detached property is cheapest in both cash and percentage terms – in boroughs such as Barking and Dagenham and Tower Hamlets.
In many parts of the capital, a semi-detached property costs an average of over £1m. In Lambeth, for instance, a typical semi is £1.04m, 225% of the average £461,320 price of a flat. With 25% equity, a buyer trading up would see their mortgage payments rise by £2,114 to £3,804 a month.
By contrast, the biggest percentage gap between a flat and a semi-detached property is in Westminster. Where this property costs £2.77m, 337% more than the average apartment. Meanwhile, in Kensington and Chelsea, the average house costs £3.02m, 300% more than the average flat. If a buyer had 25% equity, moving up to a house would mean their monthly mortgage payments would rise by a staggering £7,385 to £11,070.
The challenge for second steppers in London is not only caused by the fact that houses have risen in value more relative to flats. It’s compounded because houses also typically sell much more quickly, finding a buyer roughly 20 days sooner and taking a month less time to come to completion. In the third quarter of this year, one- and two-bedroom flats in the capital sold in an average of 87 days, compared to 69 days for three- and four-bedroom houses.
Looking back over historic Q3 data, the divergence in time to sell began in 2016 and hasn’t altered, reaching a peak in the aftermath of the Covid “race for space”. In 2023, one- and two-bed flats took 100 days to sell, compared to 66 days for three- and four-bed houses.
Trading up in London isn’t just a financial challenge - it’s a lifestyle dilemma. The gap between starter flats and larger homes has grown so wide that many buyers are being pushed to rethink their plans. For those craving more space, the reality is that moving further out of the capital might become the only viable option. As affordability pressures mount, Londoners could find themselves swapping central convenience for suburban breathing room.
