Three bedroom homes are proving to be the most popular in parts of the UK at present with buyers actually competing for the same property, it has been revealed. National property firm Strutt & Parker reports a tug of war going on in the market at the moment for three bed-roomed properties.
It seems that not only are three bed homes the most searched for types of property but they are also selling the fastest. These houses were once the sole pursuit of so called second steppers, those who have already purchased a starter flat and are looking to trade up in order to start a family, or make room for a growing brood but now they are seeing activity from other groups.
Many first time buyers are bypassing the small starter flat for a larger home, which can give much needed income in the form of renting out rooms to lodgers or friends. Rents for property have risen at a very fast pace and first time buyers are stretching themselves to get the maximum return on their investment.
‘The average age of first time buyers has risen over the years due to rocketing house prices and larger deposit requirements. This means the typical first time buyer is now a little more mature and may be at a stage in their lives where they desire a bigger home, for instance, they may have a young family,’ said Matthew Rothery from the firm’s Sevenoaks office.
Research shows that another group looking at three bed homes more than in previous years are downsizers. These are typically more mature people who are rattling around in big houses after their family have flown the nest. They are often looking for three beds as they want enough room to entertain the grandchildren or friends when they come to stay or the option to convert one of the bedrooms into an office.
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Stephanie McMahon, head of research at Strutt & Parker, said that three bedrooms have always been popular but the economic conditions since 2008 have generated a surge in interest. ‘We have seen a marked rise in the number of older people looking for smaller, and perhaps environmentally sustainable homes. Downsizing also creates the opportunity to free up capital and supplement pensions which have been hit by fund performance. In addition they often want to help their children buy homes, although ironically will be competing with them when they downsize,’ she explained.
The third group pushing up demand for three bed homes are buy-to-let investors who are in the hunt for a solid investment. These landlords are looking for capital growth. ‘Although the yields will not be as good due to the higher starting price, the prospects for price appreciation are better,’ added Rothery.
A slowdown in house building has also stoked demand for three bedroom property. The firm believes that a focus on developing one and two bed homes for professionals and four or five bed properties for families has meant that three bedroom houses have been neglected by the market resulting in undersupply. It concludes that there is now a healthy amount of potential buyers and as a result three beds are now carrying a price premium.