Unlock the Editor’s Digest at no cost
Roula Khalaf, Editor of the FT, selects her favorite tales on this weekly publication.
The UK has a number of the smallest properties in Europe and new-build ones are particularly dangerous. That’s no less than what you’d imagine when you learn what is basically out there on the subject.
Once I first started investigating, I didn’t disagree. I had been into loads of new-build flats and homes the place this appeared true — a specific favorite being the master suite the place you may find yourself boxed in by a mix of the bed room, en suite and cabinet doorways when you had multiple open at a time. But these visits to cramped properties have been matched by strolling by way of some huge new builds, from a footballer-style mansion in Surrey to a duplex house overlooking Hyde Park.
It seems that understanding of how massive our properties are is suffering from “zombie statistics” that refuse to die regardless of being discredited. The upshot is that UK properties are on the entire bigger than you might need been led to imagine. And reasonably than getting smaller, new properties have really been getting greater.
Ask most individuals how massive their house is and they’re going to in all probability reply with the variety of bedrooms. That is comprehensible: guaranteeing you could have sufficient rooms on your wants is crucial. However fewer individuals will understand how massive their house is in sq. metres or sq. ft, which is the popular metric for builders and traders.
There might be points guaranteeing consistency when measuring ground areas, however the definition of a bed room might be much more versatile. Because the chart exhibits, there’s appreciable variation in ground areas throughout completely different bed room numbers, with some two-bed properties an identical dimension and even bigger than three-beds. Simply ask those that squeeze a small mattress into what’s clearly an workplace to extend the bed room depend on the property itemizing.
The British deal with bed room numbers is bolstered by main property listings websites. You possibly can filter searches by property kind and variety of bedrooms, however there is no such thing as a simple technique to examine ground areas on a sq. metre or sq. foot foundation. This isn’t the case within the US, the place ground space and lot dimension are available filters, although they do are inclined to have a wider vary of a lot bigger properties to select from.
It’s much more tough to filter or examine costs on this foundation. Zoopla just lately reported that the standard UK dwelling prices a median of £300 per sq ft, however it’s a problem to check this determine to a house you discover on their web site. You’ll need to dig into the ground plans or Power Efficiency Certificates, and should even find yourself having so as to add up all of the room sizes to get a tough thought of the entire ground space.
This, as I do know from expertise, can rapidly get tedious when you find yourself doing a number of. Consequently, few understand how a lot they’re paying for a property on a ground space foundation. And but a number of the savviest consumers might be abroad traders who will use this pricing strategy.
The outcomes might shock those that are used to specializing in the variety of bedrooms. For instance, evaluation of revealed value knowledge by UCL confirmed the common value per sq. foot of a one-bed dwelling in my native market of Tub was £584 in 2022-23, in contrast with £485 for a two-bed and £414 for a three-bed. That small flat could be extra inexpensive primarily based on the headline value, however you’re in all probability paying a premium.
So how massive are our properties? There’s loads of knowledge on this, no less than for England, with a median ground space for all properties of 97 sq m in 2022. That places it on a par with the European common, barely above France and Germany, and just a little under Spain and Sweden — assuming we imagine the statistics are comparable.
Nevertheless it isn’t simply the common that issues, but in addition the distribution.
Additional knowledge from the English Housing Survey confirmed the common dimension of owner-occupied properties was 111 sq m in 2022, with greater than a 3rd of them above this dimension. But property sizes within the rental sectors have been a lot smaller, partly reflecting the upper proportion of flats, with a median dimension of simply 67 sq m for social rented properties. A few quarter of those have been below 50 sq m in dimension.
It’s the non-public rented sector that’s most squeezed, with a median ground space of 28 sq m per particular person, barely decrease than the 30 sq m within the social rented sector and effectively under the 61 sq m per particular person for proprietor occupiers.
So what about new-build properties? A fast search tells you that the common new construct house is 76 sq m, effectively under the European common. You may conclude this displays the stinginess of the trade that appears to squeeze as many properties as attainable right into a growth.
Certainly, it seems to be appropriate at first look as older properties are, on common, a lot bigger than newer ones. For instance, the common ground space of a house constructed earlier than 1919 was 105 sq m in 2022 in contrast with 85 sq m for these constructed within the Eighties. But, because the chart exhibits, the older properties we now stay in began off a lot smaller and have been prolonged since first being constructed. About half of these constructed earlier than 1919 have been prolonged, whereas slum clearances and different demolitions can have eliminated many smaller interval properties from the market.
It seems that, reasonably than shrinking, new properties have turn into bigger. The often used 76 sq m determine is solely unsuitable and doesn’t mirror the truth of the latest housing market. A housing market analyst tracked the supply of this determine to a report revealed in 1996 that was primarily based on new builds within the Eighties and early Nineties. Because the chart exhibits, the properties constructed on this interval have been the smallest on common of any interval.
Sadly, the 76 sq m continues to look in new articles and experiences — a real zombie statistic. As an alternative, new properties have really been getting bigger and at the moment are barely greater, on common, than present properties.
This shouldn’t be a shock on condition that, for the previous decade, we’ve had the Assist to Purchase fairness mortgage scheme — nicknamed Assist to Purchase greater — that resulted in a big shift within the new-build market away from a choice within the lead-up to the 2008 monetary disaster for metropolis centre buy-to-let flats. Since then, consumers have been extra occupied with four- and five-bed household properties in suburban places.
Wanting forward, it’s unclear how massive the 1.5mn new properties promised by the Labour authorities will probably be if and when they’re constructed. However with increased mortgage charges constraining affordability, Assist to Purchase ended and the main target switched to metropolis centre supply, they could be a bit smaller than these seen over the previous decade. Both manner, it’s advisable for consumers to interrupt out the tape measure.
Neal Hudson is a housing market analyst and founding father of the consultancy BuiltPlace
