Ready to move on up? Low interest rates mean it’s a great time to do it

Unless we are very fortunate, most of us struggle to get on the housing ladder when we start out as home owners. For our first purchase, we tend to buy what we can afford rather than a home for life. Some years down the line we may feel that it is time to upgrade, even if we don’t have a pressing need for more room.

A dream home doesn’t have to mean a larger property. It can lead you to look for a home in a better area, or with a modern kitchen, ensuite facilities or a conservatory. A bigger garden, off-street parking or a garage, or simply the luxury of a beautiful view, can all persuade a homeowner that it is time for a move. But is the old advice to buy the most expensive house you can afford still relevant?

Certainly with interest rates low at the moment, affordability of mortgage payments will encourage people to think about investing a larger proportion of their income in their home. After the global economic downturn, which left many homeowners feeling stuck on their rung of the property ladder as the market stagnated, there is now a growing optimism in the property market and buyers’ ability to afford the home they have always wanted.

Research from Lloyds Bank has revealed that homeowners are gradually starting to feel more optimistic about the time it will take them to move into their long-term family home. Almost three quarters of homeowners asked believe that they will achieve their long-term family home in no more than two more moves.

Andrew Mason, Lloyds Bank mortgage products director, says: “There’s still a perception amongst a large number of homeowners that their long-term aspirational home seems far off and they are not moving up the housing ladder as quickly as they had hoped

“Those who are further up the property ladder appear to be more satisfied with their progression, whereas those who are just starting out may feel that they have a mountain to climb before they reach their long-term home. “Despite that, first-time buyers are in a slightly better position to move than they were a year ago”

Whileinterestratesremain at a historic low, it does make financial sense to use more of your income to pay down a mortgage, as long as you don’t overstretch your finances in buying a property.

Banks now apply strict affordability tests to mortgages, so should be best placed to give advice on what is within a realistic budge.

As to what our ideal longterm home is, we tend to be quitemodestinouraspirations.

The Lloyds Bank survey foundthree-bedroomedhomes were the most popular choice for a long-term home.

Theaveragepriceofathreebedroom home in 2016 in the UK stands at £222,745, with the average total income of the occupants being £51,494.