More homeowners moving up the ladder
Figures from Lloyds Bank1 show that in 2017 more than 370,000 home movers progressed up the housing ladder and purchased their next property – the highest recorded figure for ten years. The only region to record a fall in the number moving up was Greater London.
‘SECOND-STEPPERS’ MOVING ON
Second-steppers, as they are often referred to, are mostly couples and young families moving on from their first house or flat, often looking to find somewhere where they can put down roots while their family grows up.
Homeowners ready to take their second step on the property ladder have found it easier lately, due to a number of factors. Mortgage rates have remained low, employment levels are at a high, economic growth forecasts have been revised upwards, and those who own property have seen the equity (the value tied up in their property), increase. This puts them in a stronger position and means that they can afford to put down a bigger deposit on their next property, helping to make their move more affordable.
PARENTS CONTINUING TO LEND A HAND
According to Lloyds Bank, the difference in price between a typical first-time buyer’s home and their next purchase is around £126,000. Many will have around £105,000 in equity from the sale of their first home, leaving a funding gap of around £21,000. This funding gap is sometimes filled by parents and grandparents keen to pass on their wealth during their lifetime.
MAKING THE MOST OF A MOVE
Second-steppers who want to get good value for money are thinking laterally. Many are moving out of larger towns and cities to areas that are potentially less fashionable, but better value. Some are looking at homes that have the potential to be extended in order to get the living space they need. Towns with a commuting time of around an hour are proving particularly attractive to those Londoners looking to relocate.
A mortgage is a loan secured against your home or property. Your home or property may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it.
1Lloyds Bank, Jan 2018