UK housing market is stuck on the second step

UK housing market is stuck on the second step

More than half of “second steppers” – or first-time sellers – believe that new Government-backed schemes such as Funding for Lending and NewBuy will have no influence on their struggle to buy their second home, according to a Lloyds TSB report.

Three quarters of this group would like more support from the Government, the research shows, and 86pc want more help from their mortgage lender.

Raising a deposit is the most significant barrier to moving up the property ladder – £58,836 is now needed, almost double the £31,189 required a decade ago – preventing three in five first-time sellers from trading up.

Stephen Noakes, Lloyds TSB mortgage director, said: “If second steppers get stuck on the first rung, movement at the bottom half of the ladder comes to a standstill, and this bottleneck will not only restrict the supply of starter properties but will have a knock-on effect across the whole of the housing market.

“It is vital that this group of home movers receives more support and attention, as they play an intrinsic role in getting the housing market moving again.”

The group’s problems are compounded by falling house prices pushing a quarter of respondents into negative equity. Since the typical second stepper bought their first home in the peak year of 2007, the average price paid by first-time
buyers has dropped by £20,095.

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