Over a quarter of people who would like to become second-time buyers are stuck because of negative equity or because their home has not increased enough in value to allow them to move on.
According to a new Step Up report out this morning from the Post Office, costs of moving house are also deterring 30% of prospective second-time buyers.
House hunters looking for their second home estimate they need an average of £7,279 to cover as Stamp Duty and solicitor’s fees alone. This rises to £12,313 for those living in London.
John Willcock, head of mortgages at Post Office, said: “We are often reminded of first-time buyers’ struggle to get on to the property ladder.
“However, it’s clear that second-time buyers are finding it difficult too. Stagnant or decreasing property prices in many areas of the country, the high costs involved with moving and lack of available properties on the market have meant too many people are unable to move up the property ladder.
“In the years before the financial crisis it was almost guaranteed your property would go up in value enough to move into a second, larger home, but many are finding that their homes just aren’t increasing enough.”
Second-time buyers are also struggling to move because they can’t shift their first property, with just under one in five (17%) stating they can’t find a buyer for their home. Meanwhile, 16% can’t find a property to buy.
Those second-steppers who have successfully moved also revealed that they would have done things differently: a third (33%) would have researched the area more thoroughly, while 31% would have saved up more before the move.
With hindsight, one in five (21%) would not have bought a home needing renovation, and 18% would only have looked at properties without a chain. Nearly that proportion (17%) would have used a recommended solicitor, 14% would have used a removals firm, and 12% would have cut out the estate agent.
Comments
I am in rented accommodation. The interest on my savings pays the majority of my rent, and I have no maintenance or insurance fees to worry about. So, I'm not in any hurry at all really, especially when prices are slowly coming down where I am. I appreciate the offer of help, and were I in more of a hurry, I might take you up on that. I'm more than content with how things are at the moment though.
Its your money to do with as you will but in all honesty what you are currently doing appears a bit confusing to me.
Can I politely ask if you are living at home or in rented accommodation? Please feel free not to give the exact location but I would like to give you examples you can relate to. It is no good giving you examples in Kensington if you are based in Nottingham. Where do you want to live?
What budget have you got and what sort of thing are you looking for? One final question I know you have been looking for a while now, you don't need a mortgage and are looking for a good deal, what time frame do you have in mind?
I am almost certain there is a place out there for you at a price you will be comfortable with possibly even one that will protect you from the risk of a further fall in prices. Your system of using the internet hasn't found you a home yet; I probably know some genuinely honest people in your search area who can help, if of course you would like any help. The great thing is they will not charge you a penny for the advice they give and will not take offence if you choose to disregard their advice.
"You strike a lot of these straight off any potential viewing list? They don't give a white feather for cowardice in buying a property but it seems to me you will never buy a property."
I browse Rightmove using the Price Comparison Report section, where most stuff bought in the last seven or eight years will include the price it was last sold at. As I say, using that section, I see a lot of stuff bought circa 2006 that feature photos showing evidence of young children having come along since then and asking prices 20% above the last bought price - even though sold prices round my way are at 2004 levels (and falling). I am a cash buyer and look to factor that into offers I make. I strike a lot of these properties off my list to avoid wasting the time of EAs, vendors and myself.
You strike a lot of these straight off any potential viewing list? They don't give a white feather for cowardice in buying a property but it seems to me you will never buy a property.
It would be so easy to pick holes in your post, but that won't help you and I wouldn't do it face to face so won't do it here.
Find an Agent you can trust and listen to the advice they offer, that way you will avoid missing out on a home because of your preconceived notions of property, people and circumstance you know nothing about.
What's the industry statistic for how often people move home - every six or seven years I believe?
In which case, there should be a lot of property coming to the market now that was last bought around 2006. With that being close to the peak of the market, in the case of wannabe second steppers, these are couples that stretched two incomes to buy a typcial FTB place. Now with a couple of sprogs and the reduced income that brings (as well as the static wages and less promotion opportunities in today's economy), they are looking to recoup the price they paid, plus 20% to buy the larger home they now think they need - in an environment where as the article notes prices are falling / static in many places. So yes, many are indeed stuck.
You can see these all over Rightmove - two-bed newbuild, with toys and bedding for small children featured in the pictures. I strike a lot of these straight off any potential viewing list.
Circumstance can force a sale as much as finance think divorce, relocation, kids.
But I totally agree with your first post.
re your first post - two words:
HEAR, HEAR!
re your second post, only one is needed:
DITTO! ;o)
(welcome to the world of brit1234 as well, by he way. The ridiculous "It was their decision also to overpay for a property." comment is classic brit MDT. makes one wonder if tis individual would ever buy a property at any price - lest he/she fell into the same predicament as those for which no sympathy is available.)
Of course, but realisticaly what is currently forcing anyone in that situation to sell?
Ampersat - Providing they can sit tight!
Please can you explain that a bit more? I am not quite sure how paying off the mortgage with increased capital repayments reduces negative equity.
A house bought at £150,000 with a 10% deposit and £135,000 mortgage now valued at £120,000 doesn't become worth a penny more if an owner's equity stake increases beyond the original £15,000.
Vendors in that situation are no help to the house price crash hopefuls; such vendors simply sit tight and wait for things to improve. I am sure most are quite happy and don’t require any sympathy.
Sorry but no sympathy. They have had 5 years of extra though interest rates where they could overpay increasing their equity. If the choose not to it is no ones fault but their own.
It was their decision also to overpay for a property.
Sorry to be a mood Hoover so early in the week but here is another classic bit of back to front thinking.
It never has been the case that the "first property would go up in value enough to move into a second, larger home"
Property price rises create a larger equity stake and therefore a larger deposit but all that does is facilitate a larger mortgage, it is stepping up the career ladder and earning more money that enables first home owners to afford the bigger mortgage and move to a larger home.
When the people in charge of lending money demonstrate such a lack of understanding of how the housing system works it really is very worrying, but it really does go a long way to explain why those in charge are failing to generate any sort of economic recovery.
Part of the problem is no-one will correct Mr Willcock and this explanation will be accepted as correct by a naïve media. Mr Willcock is the Head of department for a big company so he must know what he is talking about, what a pity he didn’t give a bit more thought to that particular press release.