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Whilst most of us are concerned with just getting our foot on the first rung of the property ladder, it seems the problems don’t let up even as you begin to climb. A recent report by Lloyds Bank has revealed that a total of 39% of homeowners looking to make the jump to their second home believe it is harder now than it was 12-months ago. While this doesn’t necessarily set alarm bells ringing, it does potentially mean bad weather for the wider market, especially with continued pressure on our stagnant affordable housing market.
The report also revealed that these fears are present despite homeowners typically sitting on more than £100,000 in equity, as per the figures at the end of 2016. This is compared to the mere £23,643 of equity just four years ago.
The research uncovered a lack of confidence in selling amongst this group, even though 45% of those surveyed felt that their equity position had improved over the last year.
So why are those looking to take the next step facing such difficulties?
House prices have been rising year-on-year and the sad fact is that most household incomes can’t keep up. When you consider that mortgage lending has become much stricter and stamp duty continues to weigh heavily on financially stretched buyers, the problem is all too clear.
Now, also consider that the demand for housing is at its highest in 11 years. And, according to the National Association of Estate Agents, the supply of homes continues to dwindle.
The latest data from the NAEA shows that there was an average of 439 property seekers per branch during the month of June 2015, which is the highest number since August 2004.
Demand is all well and good, however, there were only 44 homes on sale per branch during this period. Ten buyers for every property on offer does not make for a happy purchasing environment. The result was that many buyers were struggling to find a home and faced having to double their mortgages to be able to secure a desirable property.
This has led to a lack of confidence amongst ‘second steppers’ with 32% saying that they are struggling to find the right property and 26% are worried about the economic climate.
Indeed, approximately one in three are considering staying in their property and investing their money into improvements rather than entering the moving process.
Of course, if these second-steppers are not moving up the ladder, then that leaves even less space for those at the bottom, those often most vulnerable and in need of housing. How this problem will be solved going forwards is a convoluted issue, and one that has inspired many varied solutions. From £50,000 pre-fab houses, to converting to mansions and stately homes into affordable flats, it is clear UK politicians, developers and policy makers must work hard to deliver an effective scheme to house its citizens.
Looking to sell your house and move into your second home as quickly as possible? Get in contact with our team and see how we can help you.