What does 'Upsizing' mean when buying a property?
Find out what Upsizing means when you are buying a property. 'What does Upsizing mean?' plus over 150 other property related terms and jargon in plain English
There are a zillion reasons why someone might be buying a property. It could be a buy-to-let investment, it could be to get on the property ladder, it could be because they need to move to a different location.
But if they own a property and are looking to sell it and buy somewhere larger this is known as "Upsizing" or "Trading Up".
Common motivations would be:
- Couples moving in together - and using their joint income to buy something larger than they could afford individually.
- Couples starting a family - and so needing more space for the kids.
- People looking to start working from home - and so needing office or studio space.
Someone who is Upsizing will have a Trading Gap - the difference between the value of their current property and that of the larger one.
The concept of the Trading Gap is an important one because it explains why Upsizing is such a good idea in a falling market. You are selling your £175,000 2 bed house to buy a £250,000 4 bed house. This gives you a trading gap of £75,000.
If the market has fallen 10% then your two bed house has lost £17,500 of its value but the 4 bed house is down £25,000 so you'll actually save £7,500!
Incredibly a lot of buyers don't see this and in a market where they feel their property value has fallen they want to wait for price to bounce back so they can get as much as possible without realizing that, ultimately, they will lose out.
If you want to learn more about how to Upsize the smart way pick up a copy of my ebook How to Really Buy a Property.