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Second-stepping tougher than buying a first home

Second-stepping tougher than buying a first home

Category: Mortgages
Author: Leanne Macardle
Date: 29/08/2017

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

We all know the struggles of buying a first home, whether we've been there already or are still trying to take that first step. However, it seems that the struggle isn't always over once we've got that first set of keys, as research from Lloyds Bank shows that taking the second step up the ladder can be just as difficult.

Ongoing struggle

The research found that a quarter of homeowners ready to take their second step up the property ladder are finding it harder than buying their first home, up 18% from the previous report. More than half (52%) of these would-be second steppers had planned to move up the ladder in the last 12 months but rising moving costs, stamp duty and the difficulty in finding the right property meant they'd been unable to do so, which means they're living in their first home for far longer than planned.

A further 56% blamed low savings rates for their inability to amass the financial input necessary to take the next step, while 39% blame market conditions, saying that it's harder to sell their property now compared with 12 months ago. Despite this, just 9% would consider lowering their asking price to attract interest, while 51% said they're willing to remain in their current property until conditions allow a move, and 27% said they'll make improvements to their current home instead.

Unfortunately, no matter what the reason for them staying put, it's having a knock-on effect on other milestones: 23% said that they'll delay having children, while 12% said they'll have fewer children than originally planned, and 13% have had to change career as a result of the challenge to move up the ladder.

Challenging times, but clear ideas

However, second steppers remain clear about what they want from their next home, with 28% not willing to sacrifice anything from their 'must-have' list of features in order to make it easier to find their next property. A driveway sits at the top of the list, followed by a garden and a kitchen/diner, with the general type of property evenly split between a period (35%) and new build (34%) property in town with three bedrooms.

This won't necessarily be their final move, however. Second steppers plan to stay in their second property for 10 years, with only 31% not planning to move again. The eventual dream home would be a detached four-bedroom house with a garage, driveway and kitchen/diner, and they're expecting it to take a further three moves
to get to their dream home once they're on the second step.

"Moving up the property ladder has become more challenging for Second Steppers in recent years," said Andrew Mason, mortgage product director at Lloyds Bank. "The rise in house prices and moving costs, along with how difficult it is to find the right property, means that they've had to wait longer than anticipated or even put off their move entirely until the right property comes along.

"Second Steppers seem to be very clear on what they want from their next property and will stay put and improve their current home rather than make any sacrifices. Our research also shows that most homeowners think ahead and understand that it could take up to four moves in total to reach their 'dream' home."

What next?

Looking to fund your next move? You'll need the right savings account to go about it.

Start comparing the best mortgage deals to get an idea of the kind of rates you could be facing.

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

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