Thousands of young families are trapped on first rung of the housing ladder
- 43% think financing a second home is just as difficult as buying the first
Thousands of young families are trapped in their first homes because they cannot afford to move up the housing ladder.
Two-thirds of those who are looking for a bigger home have been unable to make the move they want for at least 12 months, research shows.
A combination of factors, including a lack of affordable property, high deposits on mortgages and a shortage of buyers, are leaving these couples stuck in limbo – and paralysing the rest of the housing market.
Two-thirds of those who are looking for a bigger home have been unable to make the move they want for at least 12 months, research shows
The research, by Lloyds TSB, found one in five of these ‘second steppers’ believe it is harder to move up the property ladder than to get on it in the first place.
And 43 per cent believe finding and financing a second home is just as difficult as buying their first.
The average price of a ‘second stepper’ home is some 5.2 times gross household salary.
For first time buyers, the ratio is 4.1.
Stephen Noakes, the mortgage director for Lloyds TSB, said: ‘It is vital that this group of home movers receive more support and attention as they play an intrinsic role in getting the housing market moving again.
‘If second steppers get stuck on the first rung, movement at the bottom half of the ladder comes to a standstill, and this bottleneck will not only restrict the supply of starter properties but will have a knock-on effect across the whole of the housing market.’
One in three of those looking to buy their second home said the main barrier was either a lack of affordable property or a shortage of buyers for their home.
And 71 per cent said the deposit needed for their second property was too high. The average deposit for a typical ‘second stepper’ is £60,670, more than double the average figure of £24,783 that was required ten years ago.
Many in this group will struggle to find the cash as they bought their first property at the height of the market in 2007, so have very little equity in their homes.
The high cost of moving is also a factor, the research found. It cost £8,922 to move house in 2011, an increase of 69 per cent compared to 2001, when it cost £3,632.
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