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First-Time Sellers see possible interest rate rises as their largest challenge to moving up the property ladder, according to Lloyds Bank’s annual Second Stepper report, which tracks the challenges faced by First-Time Sellers.

The report reveals one in three of these households believe it will be more difficult to sell their home this year, with worries over the economy, the size of the deposit they’ll need and a shortage of family-friendly properties.

Second Steppers are mostly couples and young families moving on from their first-time buyer homes to secure more space and a garden who typically bought their first property in 2014, when the average price of a First-Time home stood at £167,137. Based on the latest house prices figures, selling their home for the average First-Time Buyer house price of £211,296 would provide them with an average equity injection of £85,877 for their next home. That’s grown from £68,629 four years ago.

The gap between the sale of their current property and the cost of their perfect home (usually a detached property) is now £135,985. However, the average equity level of £85,877 can help reduce this gap by 63%, meaning that Second Steppers need only add an extra £50,108 to their existing mortgage.

However, across the country, there are significant regional variations in the size of this gap. In Northern Ireland, people will need to find £73,499 extra to make the step to their desired second home. At the other end of the scale, people in London need £330,599 to make the jump.

Just over a third of Second Steppers believe it will be harder to sell their existing property this year than it would have been a year ago. In addition, over a quarter are worried about the uncertain economic climate, deposit size remains a key challenge and around one in four are struggling to find the right property to move to.

Getting handy with home improvements is a solution for many Second Steppers if they can’t sell their current home, increasing from 34% in 2016 to 40% in 2017.

The report also reveals some optimism. Two out of five (40%) believe the market conditions for Second Steppers has improved compared to last year and 52% feel there are now more First-Time Buyers in the market, up from 43% in 2016. Over half (52%) also think the stamp duty changes announced in the Budget last year will increase the number of First-Time Buyers entering the market even further.

When looking for their ideal home, Second Stepper’s ‘must haves’ include a driveway or off-road parking (61%), a garden (59%) and a kitchen/diner (56%). Almost two thirds (64%) of Second Steppers have regrets about their first property purchase, with over a third wishing they had bought a bigger property. Just over one in 10 admit that they rushed to get on the property ladder and bought their first home without looking at the details.

Are you looking to make your Second-Step on the property ladder.

Here at Bluebell we are expert advisors.

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