Second-time buyers are being held back in the property market, often thanks to negative equity, according to new research. A study from the Post Office revealed 28 per cent of second steppers are finding it hard to move because they bought property during the boom for a high price and are now unable to get the same sum or more. This is compounded by relatively stagnant house prices in some areas.
While values are steadily rising across the country, they are yet to reach pre-recession levels. Consequently, negative equity has been a problem for many over the last few years. This is holding back the market, with many would-be buyers forced to stay in their current home. The cost of moving is also putting off just under a third of buyers, with one in 12 relying on financial help from family to fund their move.
However, costs associated with moving aren't just keeping second-time buyers in their existing properties. Those who are able to move still can't go up the property ladder. In fact, 30 per cent are having difficulty getting on the next step. Meanwhile, those looking for their second home estimate that they will need an average of GBP 7,279 to cover costs such as stamp duty. In London, this sum is even greater, rising to GBP 12,313.
John Willcock, head of mortgages at the Post Office, said: "We are often reminded of first-time buyers’ struggle to get onto the property ladder. However, it’s clear that second-time buyers are finding it difficult too. Stagnant or decreasing property prices in many areas of the country, the high costs involved with moving and lack of available properties on the market have meant too many people are unable to move up the property ladder."
The fact that many are still having to rely on the "bank of mum and dad" is also worrying and is a symptom of the market following the recessions. Prior to the crash, it was almost guaranteed that a property would go up in value, but this is unfortunately no longer the case, particularly outside of the capital.
- Tuesday 02 July 2013