According to a new report
Homeowners ready to take their second step up the property ladder say it’s harder than getting on it in the first place according to the latest Lloyds Bank Second Steppers report, which tracks the ongoing plight of home owners looking to sell their first property whilst buying their second.
As a result of the challenges faced by homeowners looking to take the second step on the property ladder, almost a quarter (23 per cent) say that they’ll have children later in life than they had originally planned with 12 per cent also saying that they will have fewer children. Some have said that they also had to change their career (13 per cent) as a result of their challenge to move up in the housing market.
The rise of moving costs, stamp duty and difficulty in finding the right property has meant that more than half (52 per cent) of those still living in their first home said that they had planned on moving up the property ladder in the last 12 months but have been unable to do so.
Low savings rates have also been a contributing factor and Second Steppers say that it’s taken longer for them to save enough to take the next step. However, there are also challenges on the demand side, as they also report that that it’s harder to sell their current property now compared to 12 months ago.
The rise in house prices seems to have had a positive impact on the situation, given that this population have typically been more exposed to negative equity in a downward market. Two-fifths of Second Steppers (39 per cent) said that the rise in house prices will help them to sell their current property for the right price.
Only one in ten Second Steppers will consider lowering asking price
In the event that a Second Stepper is unable to sell their current property, few (Nine per cent) said they would consider lowering their asking price to attract interest.
It seems that more Second Steppers are willing to remain in their current property to either wait until conditions allow a move (51 per cent) or make improvements to their current home (27 per cent). Just over a fifth (21 per cent) stated that they would look to rent their property instead and still move.
Andrew Mason, mortgage product director at Lloyds Bank, said:
“Moving up the property ladder has become more challenging for Second Steppers in recent years. 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.”
It takes four steps on the property ladder to get to the ‘dream’ home
Second Steppers have said that their eventual dream home would be a detached four bedroom house with the top three ideal features being a garage, driveway and kitchen/diner.
This seems a far off prospect as Second Steppers said it would take a further three moves1 to get to their dream home once they have managed to take their second step on the property ladder.
Still, despite the challenges Second Steppers are not willing to sacrifice when searching for their next home
Although Second Steppers face many challenges, 28 per cent said that they wouldn’t be willing to sacrifice anything from their ‘must-have’ list of features in order to make it easier to find their next home. Of those who were willing to make sacrifices, a conservatory would be the first thing to go followed by a garage.
A driveway is the most important feature that Second Steppers said their next home must have. Having a garden and a kitchen/diner also made the top three.
When asked what type of property Second Steppers want to purchase, typically they said that they wanted either a period (35 per cent) or new build (34 per cent) property in town with three bedrooms.
The majority realise that their next home won’t be their final home with the average amount of time Second Steppers plan to stay in their second property being 10 years. Only a third (31 per cent) said that they don’t plan to move again once they’ve taken the second step.