'Middle movers' trapped by rising house prices: Up to four million are unable to leave their first home because of soaring costs
12-10-2014
- Two-thirds of homeowners under 35 wanted to move within two years
- But, of these, almost three-quarters were unable to do so because of cost
- Most said they were waiting for their property price to increase in value
By Louise Eccles, Property Correspondent For The Daily Mail
Millions of young homeowners are trapped in their first home because of soaring house prices, research shows.
Rapid house price growth has created a generation of up to four million ‘frustrated middle movers’ who are unable to take their next step on the property ladder.
A study by Santander found that two-thirds of homeowners under 35 – most of whom were in their first home – wanted to move house within two years. But, of these, almost three-quarters would be unable to do so.
Rapid house price growth has created a generation of up to four million ‘frustrated middle movers’ who are unable to take their next step on the property ladder
The average time they believed they would have to wait to move was at least three years.
Most said the main barrier was that they were waiting for their own property to increase in value before they could afford to move, while a third were waiting for house prices to fall so they could afford their dream home.
Thousands of first-time buyers are still stuck in negative equity or have made a slim profit on their home after buying during the last property peak in 2010 or the pre-crisis peak of 2007.
Now, they are struggling to make the next step because of steep house prices, while others are finding it hard to secure a mortgage.
Tougher lending restrictions introduced in April mean that those who had no trouble taking out a mortgage the first time may now fail the affordability tests.
The survey by Santander found revealed that six in 10 homeowners had lived in their home for five years, despite only half anticipating they would have to do so.
A study by Santander found that two-thirds of homeowners under 35 – most of whom were in their first home – wanted to move house within two years. But, of these, almost three-quarters would be unable to do so
Miguel Sard, of Santander bank, said: ‘There are a lot of "frustrated middle movers" who made compromises on their first homes and have now been stuck with these for longer than they wanted, as they are finding it difficult to move up the property ladder.’
The report found nine out of 10 young homeowners made compromises on their first purchase to get on the property ladder, only to find they are now stuck with the consequences for longer than they had intended.
Two thirds have compromised on the location of their home, half compromised on the size and half settled for fewer bedrooms than they would have liked.
“ There are a lot of ‘frustrated middle movers’ who made compromises on their first homes and have now been stuck with these for longer than they wanted”
Miguel Sard of Santander
Half of respondents bought their home with less outdoor space than they wanted and the same number compromised on the style of the property.
Young homebuyers received a boost last week when the Government announced a radical overhaul of stamp duty.
Only those buying homes for more than £937,500 will be financially worse off under the new system.
Those buying an average UK home at £273,000 will typically save £4,500 in stamp duty, while the maximum saving is £4,900.
However, experts have expressed fears that increased activity in the property market will push up house prices, cancelling out much of the savings which buyers will make in stamp duty.
Mr Sard added ‘We welcome the reforms to stamp duty rates, which will benefit many families and individuals and provide a fairer structure for the vast majority of homebuyers.
‘At the same time, we recognise that the new system is likely to have an impact on house prices in many areas of the country, and so the effects of these changes will need to be monitored closely.’