One bedroom properties losing their appeal

Production of one bedroom homes is falling, as -13% fewer one beds were built in the past five years, research from Unlatch has found.

What is more, this is in an environment where the total number of properties completed has increased by 16% in the past five years.

Lee Martin, head of UK for Unlatch, feels the introduction of the Help to Buy equity loan scheme in 2013 has facilitated the decline of the one bed.

He said: “It only felt like yesterday when the demand for one bedroom properties was driving the market, especially within the first time buyer market.

“However, this consistent decline falls in line with the then rise of the government’s Help to Buy scheme, where buyers were able to borrow interest free for 5 years 20-40% towards their deposit, meaning they could move up the ladder in an accelerated timeline.

“Buyers were then able to afford that second bedroom, or even small house rather than an apartment. They would then move in with a friend or sibling, making the monthly mortgage payments even more affordable than the non-Help to Buy route.”

One bedroom properties accounted for just 6% of all homes built in the past year.

This falls to just 1% when analysing houses alone, but even where flats are concerned, one bed homes account for just 5% of total stock delivered to the market.

Martin added: “Of course, now with Help to Buy due to run its current course by 2023, could we see a return of buyer appetites for one bedroom properties? Or will there be an extension or a new product to fill the gap for that first time buyer demographic?

“Shared ownership has also played its part in the demise of one bedroom homes. It no longer has the stigma attached that it once did, with young professionals using this tool to achieve larger homes for a much more affordable deposit when compared to a traditional purchase, yet still offering the opportunity to buy more stake in the property as time goes by.

“On top of this greater diversity when it comes to routes to purchasing, there’s also the simple fact that today’s buyer aspires to have a larger home with more space, even more so since Covid.

“This means larger homes with more ‘trimmings’, such as parking, outside space and a second bedroom for use of an office space. These boxes are rarely ticked via one bedroom homes.”

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