29 Jul 2022

Insight - The demise of the one bed property

If you’re a single person, you may have realised that one-bedroom units are hard to come by, and this isn’t all due to not looking in the right places.

Unlatch has provided some insight when it comes to housebuilder preferences and the research revealed that one-bedroom properties have largely been left out in the cold of late, which has been the only area of the market to see a consistent decline in homes completed.

The single-person conundrum

The housebuilding data collected by Unlatch shows that in the last year, one-bedroom properties have accounted for just 6% of all homes built. When analysing houses alone this figure drops down to 1%, but even where flats are concerned, one-bed homes account for just 5% of total stock delivered to the market.

When looking at how housing delivery levels have changed over time the neglect of one-bedroom homes is even more apparent.

In the last year, the total number of properties completed has increased by 10% and sits 16% higher than it did five years ago.

When the change in the number of bedrooms in each property was recorded, all segments of the market depicted both positive annual and five-year growth, other than one-bedroom homes.

Down -17% in the last year alone, the level of one-bedroom homes being built has also fallen by -13% in the last five years.

A possible explanation

The data analysed shows these figures largely because the majority of one-bed homes predominantly come via the construction of flats, and, in the last five years, this property has also seen a -12% decline in overall completions.

Again, unfortunately, one-bedroom flats have witnessed the largest five-year decline, followed by two-bedroom flats, however, the number of three-bedroom flats has actually increased by 16%.

The good news is that houses, regardless of the number of bedrooms, have shown positive movement when it comes to both annual and five-year change in completions.

Lee Martin, head of UK for Unlatch says: “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.”

Martin also states that buyers were then able to afford that second bedroom, or even a small house rather than an apartment which means that 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.

Martin continues: “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. 

Martin concludes: “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.”

Link to original article

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