Homes are getting smaller. What is the impact for property investors?
Homes are 20% smaller than they used to be.
According to a study by LABC Warranty, the size of new-build homes has reduced by four square metres since 2010.
The group compared average property sizes across 20 major UK cities. Its research revealed new-build homes have decreased in size by 20% during the past 40 years.
Price per square metre
A typical new home now averages 67.8 square metres. The average cost of a UK home is £226,996, meaning house buyers are paying just under £3,396 per square metre.
The number of bedrooms has also fallen in the last forty years with an average of 2.6 bedrooms. That’s a reduction on the 3.53 bedrooms of the 1970s.
The average living room is now 17.09 square metres – that’s down by 1.64 metres in a decade. The size of master bedrooms is reduced by 0.30 metres.
Why are houses getting smaller?
In some cases, developers are reducing the size of homes to make them affordable to people who would otherwise never be able to get on the property ladder.
Rising property prices are a dominant factor behind the construction of smaller houses along with the increase in land prices.
If developers have to pay a high price for land, they need to make it profitable by increasing the number of homes they build on that plot. It’s a practice that has been encouraged by government planning laws that currently support high-density developments.
Where are the smallest houses?
Research found that Sheffield has the smallest houses in the UK where homes average 61 square metres. And in the city, every room is among the top 10 smallest for its type.
Glasgow, Newcastle, Bristol and Southampton are not far behind. Homes in these cities are on average around 65 square metres. London has the sixth smallest properties with average house sizes of 65.65 square metres.
Where can you find the largest houses?
The biggest homes can be found in Cambridge with the average house coming in at 72 square metres. That’s 20% larger than properties in Sheffield.
Oxford has the highest number of bedrooms with an average of 3.3, followed by Birmingham, Bournemouth and Belfast.
The impact on property investors
This report makes interesting reading for property investors. As does the fact that many new-build homes, built as affordable housing, are empty as housing associations have rejected them for being too small.
There are now minimum space standards that apply to normal residential homes, affordable homes and HMOs. If you’re planning to invest in land for development or purchase a potential HMO, do your research into acceptable room sizes.
Reports state that some of the affordable housing that’s currently standing empty is because guidelines changed after the development had progressed. These housebuilders are now struggling to recoup their costs.
Therefore, if investing in a new build property or new build development is something you’re considering, make sure the dimensions stack up.
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