Second Steppers More Positive About the Property Market
New research shows that those looking to buy their second home are now more positive about their position in the property market. With house prices continuing to rise and an increase in the number of first-time buyers, more of them are coming out of negative equity. This is allowing them to consider moving up the ladder to a home that better meets their current needs, such as one with more bedrooms or a stainless steel balcony.
The data released by Lloyds shows that a third of second steppers believe that selling their home will be easier this year compared with 2014. 37% of this group are eager to move at the current time in order to benefit from the general positivity in the property market. However, they still face a price gap of £128,390 if they want to get on to the next rung and buy a detached property. This gap drops to £17,864 if they opt for a semi-detached property.
This news is beneficial for the rest of the property market, as these first-time sellers are the bridge that links first-time buyers and the overall market. Without these home owners moving up, the starter homes would not be released to enable first-time buyers to get on to the ladder. This cycle is needed to keep the market moving and buoyant.
A New Home More Achievable
One of the main reasons for this positivity amongst second steppers is that the equity position of many of them has grown. 71% of these sellers feel that they are in a better position compared to this time last year when it comes to the amount of equity they have in their current property. Property prices for an average first-time-buyer home are now 31% more than they were in 2009, when many second steppers bought their first home. This means that those in this group will have an average of £87,096 equity in their home.
Levels of housing affordability for this group of buyers have also risen compared with 2014. The cost of a typical second home is now 6.4 times the UK gross annual average income, which compares with 7.1 times in 2014. This means that many of them now have the deposit required to secure a decent mortgage.
These buyers are just as significant for the housing market as first-timers, so it's important that they continue to feel positive about the sector and look to move up the ladder.