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The cost of moving up the property ladder in Horncastle

Article Simon Jory 2017-10-20
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The cost of moving up the property ladder in Horncastle

Moving to a bigger home is something people with growing young families aspire to. Many people in two-bedroom homes move to a three-bedroom home and some even make the jump to a four-bedroom home. Bigger homes, especially three-beds are high in demand and it can be a costly move.

If you live in Horncastle in a two-bedroom property and wish to move to a four-bedroom house, you would could spend on average an extra £257,695 (or £1,017.89 pcm in mortgage payments, based on the UK Bank average standard variable rate). However, going straight to a four bed from a two-bed home is quite rare as most people jump from a two to a three-bedroom home, then later in life, from a three to four-bedroom home.

The average property price for a property in the local area by the number of bedrooms it has is as follows:

Average Property Price

The cost to make the jump upmarket from one bedroom to two bedrooms, two to three bedrooms etc, both in actual money and in mortgage payments using the current standard variable rate of UK Banks of 4.74% is as follows:

  Horncastle
  Price Difference to make the move Cost per month to move up market (Mortgage)
1 bed to 2 bed £51,297 £202.62
2 bed to 3 bed £56,500 £223.17
2 bed to 4 bed £257,695 £1,017.89
3 bed to 4 bed £201,195 £794.72

The actual mortgage cost could be higher or lower depending on the mortgage taken.

There are some interesting jumps in costs when moving upmarket. The cost of moving from one to two beds, and two to three beds is relatively reasonable, whilst the jump from three to four beds in Horncastle is quite high, hence why some four bed properties are taking slightly longer to sell. On an aside, 4 and 5 bed properties don't offer the best returns for buy to let because the monthly finance costs and rents achieved don't match up so well.

Looking at the recent stock of properties in Horncastle, this also makes interesting reading...

Housing Stock in Horncastle by Bedrooms
1 bed 2 bed 3 bed 4 bed 5 bed
18.75% 43.75% 18.75% 12.50% 6.25%
Housing Stock in Horncastle

The most active purchasers can be the 20 something and 30 something home-owning parents with growing families. Many look to more modern developments for the perfect balance of access to decent primary schools, commutability and lifestyle. For landlords looking to buy within Horncastle, they face stiff competition from these 20/30 something families, making the three-bedroom property massively in demand, often attracting spirited offers and selling within weeks of listing. This mix of homebuyers and landlords is a pressure point in the market.

Yet, the cost of an additional bedroom can be too much for some buyers. It is quite challenging moving home the first time, but to then find you are priced out on the next move up the ladder can be disconcerting, with families often having to move to a different area to get the bigger home they need.

Nevertheless, that's the place many homeowners find themselves in with the cost of the additional bedroom being too much to bear. To those buying their home for the first time, all I suggest is they not only consider the mortgage payments and other costs of their first home, but also do their homework into their next rung up the property ladder. Thinking about it now will keep you ahead of the game in the future; as your number of bedrooms, family property needs and lifestyle wants change.

Sources:

  1. The average asking price is using a combination of Zoopla and other portals to get the average asking price
  2. Housing stock is the historic split down by bedrooms on your place of business
  3. Mortgage rate of 4.74% is an average standard variable rate

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MEET THE TEAM

Simon Jory

Simon Jory

Simon has been in Estate Agency for over 32 years and is a Fellow of the National Association of Estate Agents. Having working in all kinds of changing market conditions he is well placed to advise on how best to sell your home.

Anne Pearce

Anne Pearce

Anne prides herself on working to the highest standards and believes everyone should receive the best possible customer service. With over 20 years' experience she will not miss and opportunity.

Dawn Bannister-Law

Dawn Bannister-Law

Prior to moving to Lincolnshire, Dawn was a valuer for more than 19 years in Bakewell in the Peak District. Dawn strongly believes buyers, sellers, landlords or tenants are all as important as each other

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