Just How Different are the US and UK Residential Markets?
The US and the UK have two of the world’s strongest economies, and their strengths lie in almost every sector — including real estate. Regardless of whether you’re looking to buy a property as a home or as an investment, it’s important to know how each market compares, so you can find the right property for your needs.
Join Strawberry Forge as we look at the tale of the tape.
The Size of Property
American real estate has a lot going for it, and one area where it truly stands head and shoulders above the entire world is in the average size of residential properties.
Across the United Kingdom, the mean size of a house is 729 sq ft. In the US, a single family house measures in at a staggering 2301 sq ft, which is over 3x larger than the UK average.
When we break that number down room by room, it’s clear to see how much America values spacious living areas. The average size of a living room in the US is 340 sq ft, whereas in the UK it’s 184 sq ft. Master bedrooms in the States come in at 244 sq ft while the UK’s measures in at 144 sq ft.
The sheer size difference between residential properties in both countries is monumental. But is size the biggest contrast, or are the nations a lot more similar than we first thought?
Based on second quarter figures from 2021 and with the UK’s currency converted to US dollars, there is a sizable difference between the price of a house in the United Kingdom and one in the United States.
Average house prices in the UK are £256,000, which is around $342,115. In America, the mean cost is $374,900. A difference of $32,785, means properties in the UK are more affordable if you’re looking for an investment.
But with costs in mind, you have to consider how much property you actually get for your money. If you’re looking for a home, houses in the UK are more than 3x smaller, but the prices aren’t. For the cost of an extra one year’s wages, an American property offers a lot more space and a great deal more value.
And yet, all that extra space comes with a different price regardless of whether you’re looking for a home or a rental investment opportunity. Upkeep and maintenance costs more time and money in the long-run, so it’s worth considering how much room you, your family or tenants need to live comfortably.
House Price Growth
COVID-19 played a huge part in affecting house price growth in the last two years across the entire world. There have been huge drops and substantial booms, but the market has now stabilized for the most part.
Taking a full year average between June 2020 and June 2021, both countries saw very healthy growth. In the UK, house prices rose by 13% while the US saw a mean rise of 16%.
Capital growth plays an important part in any property purchase, so it’s great to see houses bought one year previously could be sold for a significant profit.
Naturally, some areas have fared better than others. As an example, the North West of England saw capital growth exceed 15% whereas London only saw a rise of 2.8%.
No matter where you’re looking to buy in the US or UK, it’s always important to research the specific area first, and not just go off the means. But on the whole, it looks like both markets have a lot to offer long-term investors.
Which is Best: US or UK?
Strawberry Forge specialises in property marketing, so we understand the importance of purchasing the best property for your needs. In terms of living quality, it can be argued that the US currently has the edge thanks to its more spacious developments, but not everyone is in the market for a huge home.
Some people prefer a more minimalist lifestyle and others may be looking to downsize from their current family home. And let’s not forget, bigger properties can also come with bigger problems and running costs. Everyone has different requirements, and while big is good, it’s not always better.
For investment opportunities, both nations provide intriguing options. Our figures show that UK properties are more affordable when prices are converted to dollars, but the US is seeing slightly higher capital growth — though, we’re sure you can find properties on both sides of the pond that exceed the average if you know where to look. That’s the beauty of property; there’s always a good deal to be found no matter where you are in the world.
International real estate is something that always piques our attention, and we enjoy taking on projects where we can deep dive into the global market. If you have a need for digital services, feel free to get in contact and learn how we can deliver on your projects.