9 out of 10 towns too expensive for families to trade up

In 265 of 276 UK towns, moving up the property ladder from a starter home to a larger family home, can be as challenging as getting a first foot on the ladder. New data has revealed that the difference in the average cost of a one or two bedroom home compared to a three to four bedroom property is 50% or more in 96% of UK towns. The average price difference across the UK is 42%, leaving homeowners needing to find an extra £70,000 on average to move up.
 
Experian’s analysis also shows that in over half of the UK’s towns and cities the current average family income would not even be enough to secure a mortgage on a one or two bedroom property. The same is true in over two thirds of the UK’s postal districts.
 
Jonathan Westley, Managing Director of Experian’s Consumer Information Services UK&I, said: “The current housing squeeze is not only impacting on first-time buyers, but also second-time buyers; often people who have growing families and need more space. For families in some locations this can mean a choice between staying put or moving to another area in order to move up.
 
Getting that first foot on the ladder is an important step, but moving on to a larger home can be as challenging, particularly given the shortage of housing in some areas and the increased focus on affordability  in mortgage lending rules. At Experian we try to help people get in shape financially so their credit report helps put them in a good position to secure a mortgage they can afford in order to move up, and at the best rates.”

Through this new property insight and advice, Experian is aiming to help people navigate the mortgage process and ensure they’re in good financial shape to be able to move home.

Central Scotland and the South East the most difficult regions

The property gap is widest in Scotland’s central belt, particularly around Glasgow, with the cost of a larger property at least double that of a one or two bedroom home in five locations – East Kilbride (123% more), Clydebank (122%), Paisley (114%), Greenock (109%) and Hamilton (100%).
 
Experian’s analysis also revealed that overall these towns are among the least affluent in the UK. Here local populations are dominated by people on lower incomes, some homeowners and some renting homes, alongside pockets of more affluent commuting families. For example, 25% of working people in East Kilbride work in Glasgow, as does 32% of the working population in Clydebank and 31% in Paisley.
 
Paul Russell, Director of Analytics at Experian’s Decision Analytics, comments: “The prices we see for larger properties in these areas may be inflated by a population of relatively affluent Glasgow commuting families. This will have the effect of driving up demand and prices for larger homes, while the stock of smaller homes is not subject to the same levels of demand, keeping prices lower. For those families in smaller homes wishing to move up in these areas, the cost may well be prohibitive.”
 
Outside of Scotland, other surprising hotspots were Burnley and Abergavenny, where the cost of moving up is at least double, most likely driven by a lack of modern high quality one or two bedroom houses. Homeowners in South East commuting towns, which are dominated by affluent professional families, also face similar challenges to those in Scotland. People living in Farnham, High Wycombe, Tunbridge Wells, Horsham and Bishops Stortford all face having to increase their borrowing to fund an additional 90% or more on the value of their existing home to move up to a three or four bedroom home.

Top ten towns with the highest per cent property price difference (excluding central London)

However, in some parts of the country, regeneration and the building of smart city centre flats for affluent city workers has created a skew in house prices. In these areas, the average cost of three or four bedroom homes is as little as a quarter more than a one or two bedroom property.

This is the case in central Manchester where a two or three bedroom home is just 25% more, Cheapside in London (26% more), and Stratford (28% more) with high numbers of flats developed for the Olympics and now populated with young professional singles and home-sharers. In some specific postal districts, for example in Leeds and Middlesbrough, older larger properties are cheaper than newer smaller homes as regeneration spreads.