Second-time buyers held back by negative equity, says Post Office
According to research from Post Office’s Step-Up report, 28% of second-time buyers are unable to progress on the property ladder due to negative equity.Costs involved in moving have also meant nearly one in three (30%) of all prospective second-time buyers are having difficulty in climbing the property ladder. House hunters looking for their second home estimate they need an average of £7,279 to cover costs such as stamp duty and solicitor’s fees alone. This rises to £12,313 for those living in London.
As a result some second-time buyers still need a helping hand to raise the money to move. One in 12 (eight per cent) of second-time buyers are relying on their parents or other family members for financial help, and a further 11 per cent are turning to their partner. Seven per cent are hoping an inheritance will help bolster their home-buying funds, while six per cent have even been forced to take an additional job to get some extra cash to fund their move.
John Willcock, Head of Mortgages at 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.
“Relying on the bank of mum and dad is not just the preserve of first-time buyers - second-time buyers are also looking to their parents to fund the move up the ladder. In the years before the financial crisis it was almost guaranteed your property would go up in value enough to move into a second, larger home, but many are finding that their homes just aren’t increasing enough.”
Second-time buyers are also struggling to move because they can’t shift their first property, with just under one in five (17 per cent) stating they can’t find a buyer for their home. Meanwhile, 16 per just can’t find a property they want to buy.
Hardened house hunters are using their past house-buying experience in order to make sure they don’t repeat the same mistakes. A third (33 per cent) of second-time buyers said they would research a new area more thoroughly before they committed to buying. Almost three in 10 (31 per cent) admit they would save more money in order to cover incidental costs which they did not previously anticipate.
John Willcock continued:
“It’s clear many homebuyers have learnt from previous experience. It is absolutely vital to be as prepared as possible when buying a home, whether planning for unexpected costs (which nearly always crop up) or researching the area and speaking to neighbours; putting together to-do list for all aspects of moving and costs involved will help should any nasty surprises arise.
“At Post Office many of our products have no arrangement fee, free standard variation and there’s no higher lending charge, which should give movers a helping hand covering costs as they climb the property ladder.”