Next Step on the Property Ladder Becoming More Expensive
A new report has shown that financing a second home is becoming more expensive. With a drive to get first-time buyers into the market, those looking to take the next step are finding it increasingly costly. This is preventing some home owners from moving up and could cause the market to stagnate as smaller homes are tied up.
The Lloyds Bank report found that it costs around £60,000 to buy the next property. This is twice the amount that first-time buyers currently need as a deposit, and the figure has increased by £15,000 since last year. These costs, which include a range of fees associated with buying and selling properties, are one of the main reasons preventing people making that move to their second property.
There are large differences across the country, with some regions suffering more than others when it comes to affording the next property. The cost is only around £21,000 in the West Midlands, but it rises to £80,000 in East Anglia.
Confidence Still Rising
Despite these costs for those wanting to buy their second home, there is still a substantial amount of confidence in the property market. This has been helped by increasing property prices, which have lessened some of the financial pressure, as sellers have been able to take advantage of a rise in their equity levels.
Many within the industry expect prices to rise again in the near future. This will be supported by better employment and economic prospects across the country, which should convince some property owners to test the market. These rises will likely be less than we saw last winter. Stricter rules on lending and the worry over a possible rise in interest rates means some home owners will have to put their dreams of a new property with a glass staircase or stunning garden on hold.
The Average Home
The latest figures show that the cost of the average home in Britain is still increasing. Across the country the average is now £203,135, according to data from the estate agency Haart. For first-time buyers, the average that they are now paying is £160,218. Each new property that the estate agency takes on has around 10 buyers waiting to view it. This figure is up from eight in two years and shows how confidence is continuing to grow, even with the heavy costs associated with a move.