Second steppers, that is those who are looking to move from their first home, have become stuck on the property ladder and are hardest hit by the UK’s subdued housing market, a survey shows.
The majority, some 61%, have been stuck on the property ladder for 12 months and one in five now believe it is harder to move up the ladder than get on it in the first place, research from Lloyds TSB has found.
Home affordability, negative equity, higher deposits, lack of buyers and cost of moving are just some of the challenges this group of home movers face.
Almost three quarters, 72%, of respondents call on the government to take action to help those trying to sell their first home.
The report also reveals general pessimism about the future of the housing market. A third, 34%, believe it is going to be harder to sell their property this year than last, with over half, 54%, predicting that the housing market will not improve this year.
Some 35% said that a lack of affordable property to buy was the main barrier while 32% said it was a lack of offers from potential first time buyers that prevented them from moving on.
The majority, 71%, of second time buyers are concerned about the higher levels of deposit needed for their second property often because of a lack of equity, with 36% admitting that the lack of any deposit is the main problem they face in climbing up the ladder. The average deposit for a typical second stepper in 2011 was £60,670 more than double the average deposit required in 2001 when it was £24,783.
Decline in the level of equity means that almost one in five, 18%; do not have enough equity in their current property to move.
Also the cost of moving rises substantially and general fees and charges associated with moving home was cited as one of the main challenges, especially amongst those living in the south of England.
The cost of moving house for a home mover stood at an average of £8,922 in 2011, an increase of 69% compared to 2001. This is the highest cost since the peak of the housing market and more than three times higher than for first time buyers for which it is £3,334.
Home affordability for first time sellers is at its least favourable level for over 25 years and is now less favourable than for those entering the housing market for the first time, the report also shows.
‘First time sellers are now faced with some very tough challenges when trying to make their next move on the property ladder and many are finding it more difficult than getting on the ladder in the first place. 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,’ said Stephen Noakes, mortgage director at Lloyds TSB.
‘To achieve a sustainable housing market we need to see movement throughout the market. 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,’ he added.