Lift for property 'second steppers'
06-06-2015
The struggle for home owners trying to take their second step on the housing ladder is showing signs improving, according to a report.
People typically have more equity in their property now thanks to price rises
Press Association
The struggle for home owners trying to take their second step on the housing ladder is showing signs improving, according to a report.
Seven in 10 (71%) people preparing to sell their first home and move into their second feel that their equity position, or the amount of cash they have in their home once any mortgage is taken into account, has improved over the last year, Lloyds Bank found.
Rising property prices and an influx of first-time buyers looking for a starter home have helped the position of "second steppers", the report found.
Typically, these home owners will have got onto the property ladder themselves in 2009, when the housing market was in a dip. Since 2009, the average price of a first-time buyer home has surged by 31%. This means that second steppers now have around £87,096 worth of equity in their home, Lloyds estimates.
The estimated average equity level for second steppers has increased by more than £36,000 over the past 12 months - due to first-time buyers facing paying higher property prices to get onto the property ladder.
One in three (33%) second steppers think it will be easier to sell their home this year, which is almost treble the number when the same question was asked in 2012, Lloyds said.
Across the housing market generally, several recent reports have pointed to an upward pressure on property prices due to a lack of homes for buyers to choose from.
Despite the boost to their own equity positions, second steppers still typically need to find an extra £128,390 to plug the gap between the sale price of their current property and the cost of the home they want to move to, Lloyds said. It found that second steppers tended to want a detached property as their next home.
Andy Hulme, Lloyds Bank mortgages director, said: "A steady rise in property values in 2015 should further ease the constraint on many
More than 500 second steppers were surveyed for the report.
Housing Minister Brandon Lewis: "We're determined to help hard-working people achieve the dream of home ownership
"Help to Buy has already helped nearly 100,000 people buy a home, by enabling them to take on mortgages with deposits as low as 5%. This is assisting many aspiring home-owners to purchase their first home, but is also helping existing home-owners to move up the property ladder.
"But one of the biggest things we've done to help aspiring and existing home-owners is to tackle the record deficit we inherited, keeping interest rates at their record low and mortgages more affordable."