It is harder to take the second step on the property ladder than it is to get on the ladder in the first place, according to a recent report.
The study, which looked at homeowners looking to sell their first home and buy their second, was conducted by Lloyds Bank.
Obstacles for Second Steppers
It found that a rise in moving costs, stamp duty and difficulty in finding the right property has meant that more than half (52%) of those still living in their first home said that they had planned on moving up the property ladder in the last 12 months but have been unable to do so.
Low savings rates have also been a problem and second steppers say that it’s taken longer for them to save enough to take the next step. However, there are challenges on the demand side too, as they also report that that it’s harder to sell their current property now compared to 12 months ago (39%).
As a result, many would-be second steppers have had to adjust their life plans, with almost a quarter (23%) saying that they’ll have children later in life than they had originally planned, and 12% saying that they will have fewer children. Some have said that they also had to change their career (13%) as a result of the challenge to move up in the housing market.
Unwillingness to Compromise
However, despite the challenges facing second steppers, many are not prepared to compromise on what they want from their next home. Around 28% said that they wouldn’t be willing to sacrifice anything from their ‘must-have’ list of features in order to make it easier to find their next home. Of those who were willing to make sacrifices, a conservatory would apparently be the first thing to go followed by a garage.
The top ‘must-have’ feature second steppers are looking for in their next home is a driveway, followed by a garden and a kitchen/diner.
Impact on First-Time Buyers
In a separate piece of research, Lloyds Bank has revealed that the lack of movement further up the housing ladder has had a knock-on effect on first-time buyers.
The study found that there were 171,300 home movers in the first half of 2017 compared with 174,300 in the same period last year. A decade ago, just under two-thirds (64%) of all house purchases financed by a mortgage were made by home movers. In 2017, this proportion has dropped to just over half (51%).
“In the past year, the number of home movers appears to have stabilised despite continuing low interest rates and rising employment,” commented Andrew Mason, Lloyds Bank mortgage products director. “There are a number of factors which could be influencing this, more people are paying off their mortgages and not moving, with supply at historic low levels there could be a shortage of suitable homes coming on the market and the cost of moving house could be putting people off.”
“This has meant that home movers now account for just half of today’s housing market compared to a decade ago when it accounted for two-thirds of the market,” he added. “This has a knock on affect for first-time buyers as there will be fewer properties available for them also.”
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