The power of three
THREE is the magic number when it comes to the most in-demand property in Britain. Three-bedroom homes are just the right size for growing families and perfect for downsizers who want a hobby room or somewhere for guests to stay over. The three-bedroom homes that get snapped up the quickest are usually in smaller cities with good public transport, useful shops and a good choice of pubs, cafés, restaurants and leisure facilities.
St Albans is the most expensive city in which to upgrade from a two-bedroom flat, according to estate agents Strutt & Parker, with the additional price an average £185,640, while Liverpool is the most affordable city to make the step up – three-bedroom houses there are often the same price as new-build two-bedroom flats and sometimes cheaper.
Winchester in Hampshire and Chichester in West Sussex take second and third places for price premiums (£160,108 and £142,157, respectively), thanks to the huge demand and limited supply of suitable homes in the south east.
“The largest price gaps are where competition for three-bedroom houses is at its highest,” explains Stephanie McMahon, head of research at Strutt & Parker.
“These family homes are a property ‘sweet spot’, attracting interest from buyers even at times when the rest of the housing market is relatively static.
“The most expensive cities generally reflect markets that are popular with growing families. Four of the top five are in the commuter belt, so this trend is most acute for those who have relocated from London.”
Young parents with growing families are winning the fight for three-bedroom homes in St Albans, mostly because they are attracted to the 19-minute train journey into London, although older people also like the city’s handsome medieval streets and good shops.
“This mix of locals and Londoners, from couples to young families, is a pressure point for our market,” says Rozanne Edwards, head of Strutt & Parker St Albans. “Demand in St Albans is far outstripping supply at the moment so it is unsurprising that we are at the top of the list for price premiums.”
Other historic cities in the south such as Salisbury, Cambridge and Canterbury are also very much in demand. You’ll pay £102,338 more for a three-bedroom house than a two-bedroom flat in Salisbury, with the difference at £98,698 and £87,356 for Cambridge and Canterbury.
Richard Freshwater, director at Cambridge-based Cheffins, says: “Threebedroom homes have been the highest in demand in the central Cambridge city market for the past three years.
“We’ve seen prices for this bracket of the market rise by around 30 per cent from 2014 to 2017 and they continue to do so, as they attract the highest concentration of buyers.
“We are seeing buyers from these type of homes vary from those relocating to the area for work, people who are upsizing but can’t afford to make the next leap to a four-bedroom house and also downsizers moving from the larger city centre homes to release equity. This market is hugely disparate in Cambridge and prices can range from around £400,000 to £1million.”
By contrast, cities such as Bristol and Glasgow have a much smaller price jump between flats and houses (£21,166 and £32,646 respectively), mostly for the same reason as in Liverpool.
McMahon explains: “Much of this is due to high-value flats in urban locations. Places like Bristol or Glasgow, that rank as some of the best-value cities for the growing family, both have a good mix of housing stock.”
Of the other cities where the difference between a flat and a house is relatively low, Bath also stands out. Three-bedroom homes are just £7,841 more expensive than flats, although that might not be true for many more years thanks to the city’s regeneration. So whether you live in the north, south, east or west, never underestimate the power of three.