"It’s clear that the difficult conditions seen in recent years as a result of higher interest rates have reduced market activity levels on both fronts, with those buyers who have made their move more likely to have downsized in order to reduce the costs associated with homeownership, as well as benefiting from equity release"
- Verona Frankish - Yopa
Yopa analysed the number of upsizing and downsizing transactions seen across the UK property market and how this has changed, to understand how buyers have responded to difficult economic conditions and great uncertainty around the cost of living and borrowing.
Upsizing
The data reveals that last year, upsizing homebuyers accounted for 440,526 transactions, equivalent to 60.6% of all purchases made in 2023.
However, due to tough market conditions, this total upsizing transaction figure represents a -31% annual decline compared to 2022 while, as a proportion of all annual sales, it marks a drop of -3%.
The upsizing hotspots in which upsizing buyers represent the largest proportion of all annual sales in 2023 were Northern Ireland (77%), Scotland (71%), and London (64%).
Downsizing
The data goes on to show that 2023 saw 232,439 downsizing transactions.
Due once more to difficult economic conditions causing fewer people to move home, this total represented a -21% drop on the previous year. However, also due to the aforementioned economic difficulties, these transactions accounted for 32% of all property sales for the year, which is a rise of 3% compared to 2022, as those who did make their move increasingly chose to downsize to reduce their property-related outgoings.
The regions which account for the largest proportion of downsizing transactions in 2023 are the South West (37%), South East (36%), and the East of England (36%). This comes as little surprise as these are also among the nation’s most expensive housing markets in which people who are facing tough financial times may want to downsize and free up some cash.
CEO of Yopa, Verona Frankish, commented: “There’s a lot of focus on buyers when it comes to climbing up the property ladder whilst downsizing is usually something we associate with those in later life, but combined, this market movement accounts for a vast majority of all the purchases made each year.
"However, it’s clear that the difficult conditions seen in recent years as a result of higher interest rates have reduced market activity levels on both fronts, with those buyers who have made their move more likely to have downsized in order to reduce the costs associated with homeownership, as well as benefiting from equity release.
"The good news is that, so far this year, the property market has stabilised and we’ve seen the first rates cut in some time, which has helped to boost buyer confidence.
"It will be interesting to see if, come the end of this year, downsizers still account for the majority of market activity, or if those with ambitions of owning larger homes have decided to jump back on the property ladder.”
