Property ladder steep for buyers

‘Second steppers’ need £108,000 to move on to their next house

HOUSE hunters hoping to move up the property ladder from their first home are having to find an extra £108,000 to make up the price differential, according to a study.

The so-called “second steppers” group mainly made up of younger couples aiming to move up from flat to houses with gardens are increasingly finding it difficult to bring the gap in prices.

Lloyds Bank, which carried out the survey, found that although many of the home owners believe they have £100,000 of equity in their current properties – a third said they are finding it more difficult to sell up with the knock-on effect that they may have to reduce their prices.

The company’s mortgage director, Andrew Mason, said: “Secondsteppers are telling us that finding the right property can be tough, and because of that, they are delaying their move.

“However, if too many second steppers hold out for a long time for their dream home this could reduce the availability of homes for firsttime buyers and slow the market.”.

The bank’s study found 39 per cent of second steppers surveyed in December 2016 believe it will be more difficult to sell their home this year compared with a year earlier.

In December 2015, 18 per cent of second steppers had told the survey they felt this way.

The poll also found a lack of confidence existed among second steppers about selling up despite the fact almost half (45 per cent) believed they had more savings or their home was worth more than in December 2015.

Around one in three (34 per cent) admitted in the survey they are considering staying put and improving their existing home rather than moving.

Meanwhile, 32 per cent said they are struggling to find the right property, while 26 per cent are worried about the uncertain economic climate.

More than a third (35 per cent) of second steppers want to move to a period property, with nearly the same proportion (34 per cent) seeking a new-build home.

The survey also reveals that less than one in five (18 per cent) of second steppers would be willing to buy a home that needs renovation.

Based on the average length of time that home owners spend in a property, Lloyds assumed that today’s second steppers had bought their first home in 2012 for its calculations. The average price of a first-time home across the UK at that time was £140,004. Now, the average first-time buyer house price is £205,723.

Lloyds said this price jump would provide second steppers with average equity of £105,068 to inject in their next home, around two-thirds of which is due to house price growth.

The remainder is due to the initial deposit and mortgage repayments made on their existing property.

Meanwhile, conveyancing service LMNS has reported an increase in people moving to longterm fixed rate deals of up to five years to counter the impact of Brexit – which is due in 2019 – and the possibility of rising interest rates.