We hear a lot about the first rung of the property ladder, or rather "how difficult next to nigh on impossible" it is for first time buyers to make that first step on the ladder - so much so that we forget that it is a first rung, and there is a whole ladder above it. Further more, without the rest of the ladder there wouldn't be a first rung.
We know that in theory it is much easier for first time buyers to get on the property ladder in the north than the south. That first time buyers can feasibly afford to buy in the north, and the only hurdles are having a good enough credit rating, and sufficient deposit to make the mortgage a reality. While in the south they have those hurdles coupled with the fact that many quite simply can't afford to buy at current prices. But what about those who have made that first rung and are now trying to climb onto the second?
You'd think that it would be the same for second-time buyers as for first time buyers; that it would be easier in the north than the south but in the current climate all bets are off. Actually now and obviously on an average basis it is easier to move up to the second rung of the property ladder in the south than it is the north, here's why.
1: You need a buyer to move up
Right now it is a lot easier to sell in the south than the north, because the economy and labour markets are in better shape. For example many of the government cut backs have focussed on the public sector and mainly in the north.
2: You need to get the best price
Again, for the reasons above, prices are stagnating and/or falling in the north, but growing in the south. Thus, those who want to trade-up in the south can get a better price, and therefore a better mortgage deal than those in the north. Depending on the amount the owner still owns the price they are able to achieve for their home is often the deal-maker/breaker.
3: The fractured mortgage market
Most people trading up onto the second rung of the property ladder will need a mortgage to make the next step. Like it or not the banks are just more willing to lend on properties in the south than the north right now, because of the reason given above; prices are still much more volatile in the north than the south.
So there you have it, first time buyers can get onto the property ladder more easily in the north, but are more likely to be stuck on rung one till the crisis dies down than their counterparts in the south. This is just another aspect of the weird and wacky UK housing market at present.
- Wednesday 30 November 2011