Second-time homebuyers can’t afford to move
Half of second-time homebuyers are stuck on the property ladder, unable to afford the next move up the property ladder. As a result, 42% are planning to stay in their existing property and build an extension instead.
According to research from Abbey, the country’s second-biggest mortgage lender, the main barrier to moving up the ladder is that homeowners simply cannot afford the larger mortgages they would need in order to trade up. And 7% say that they also cannot afford the cost of moving, including Stamp Duty and legal fees.
Paula Ickinger, Product Executive, Mortgages and Loans said: “Almost half of the UK population own their home with a mortgage, and a further 23% own their home outright. If these homeowners do decide to stay put and extend this could create a bottleneck in the housing market for both new and existing property owners.
“Generally speaking, people are getting on the property ladder later in life than they were 10 or 20 years ago, and clearly house price inflation is an issue. Wage increases have not kept pace and therefore this has had a significant impact on existing homeowners’ ability to move up to a bigger property. First-time buyers are getting older whilst they are also squeezing in careers and families before turning forty. They may be trying to take bigger steps up the ladder in a shorter period of time, but high house prices are preventing them from doing so.”