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Second-time buyers trapped by negative equity

Second-time buyers trapped by negative equity

Category: Mortgages

Updated: 27/06/2013
First Published: 27/06/2013

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Thousands of prospective second-time buyers are unable to move up the property ladder due to their property being in negative equity and sky high moving costs.

Research carried out by the Post Office found 28% of people are being held back by their property being valued at less than initially purchased, whilst 30% are having to stay in their first property due to the excessively high costs involved with moving.

A typical homeowner looking to move for the second time faces an average cost of £7,279 to cover stamp duty and legal fees, whilst this figure rises to over £12,000 for people residing in London.

The situation has left many people stuck in a property stale mate, with 12% admitting to borrowing money from family members in order to move. A further 7% are hoping that an inheritance windfall will help provide the necessary funding.

Head of mortgages at the Post Office, John Willcock, 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."

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