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Londoners upsizing from three beds to four ‘need £600k mortgage’ says agency

If your New Year’s resolution is to move to a four bedroom home in London or the south of England, you had better start selling the Christmas presents on eBay - you’re probably going to need more money than you thought.

Shock research from Savills suggests that a typical four bed house in the capital now costs over £990,000, despite a spate of Brexit jitters in the housing market. Even if you already own a place in London, moving up the property ladder will almost certainly cost several hundreds of thousands of pounds. 

The agency calculates that a typical household needs an income of £87,940 to afford a mortgage to upsize from a two bed home to a three bedder, even if they have built up large sums of equity over the past decade. 


Moving from three to four beds in the capital would require even more - an income of £162,523.

Savills’ new research is based on average house prices and assuming people live in their previous home for 10 years before moving.

In that scenario, a London buyer moving from a three bedroom home to a four bedder will typically need £429,561 extra to pay for the property itself, the stamp duty and moving costs.

Even in the south east commuter belt the gap is still a hefty £224,859 whereas in the West Midlands it’s £155,813 and in Wales a modest £126,551. 

The problem is so much starker in the capital because a four bed home is now over £990,000 on average, says the agency. 

That means a typical buyer - even with handsome equity from the sale of a smaller home - could only afford the mortgage required to upsize if they had a household income of £162,500. That’s £10,000 more than the salary of the Prime Minister.

Savills’ calculations presume that in London an owner selling a three-bed home will have made a chunky £440,000 in equity over 10 years. Even with that in their back pocket they would still need a mortgage of £609,000 to afford the family-friendly four bedder once the costs of moving are added to the property price. 

However if they’re moving from, say, a below-average priced cheaper suburb to an above-average priced inner London home, or if their previous house was bought on an interest-only mortgage, then the sums become scarier still. 

The south east of England is less expensive than London but still requires people to have far more income than most families enjoy. 

So to move from three beds to four beds in the Home Counties, using the same assumptions as before, an upsizer would require an average household income of £92,400. 

That income requirement drops dramatically to £65,000 in the Midlands and the north of England, even though in these areas the equity earned on a three bedroom house would be so much less than in the leafy south. 

“People are finding it much harder to reach the Holy Grail of a four bed house in London and the south of England unless they’re able to pay down their existing mortgage or get a slug of equity through inheritance” says Lucian Cook, Savills’ director of residential research.


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