Increased Demand for First Homes & Better Rates Make that Second Step Easier
There could finally be signs of good news, according to This is Money, the increased demand for first homes is making it easier for those who are looking to get onto that second step on the property ladder.
The Lloyds Banking Group began recording the perils of going from a first home, usually a one or two-bedroom flat, to a second property, usually a semi-detached or detached house.
For most of the time the gap has been considered to be too vast and the majority of buyers were trapped in their first homes. It is expected that this year there will be a record number of homeowners moving on up the ladder.
Andy Hulme, the bank’s mortgage director remarked: “Challenges remain for second-steppers, but a steady rise in property values this year should make it easier for many to get into a bigger home”.
It is estimated that the average first-time buyers gets themselves prepared to move up the property ladder six years after purchasing their first home.
If we look back six years ago, then this means that buyers would have bought their house when house prices were relatively low, meaning that they are now sitting on a wealth of equity.
Those looking to sell their homes should also find it fairly easy to sell their homes due to the fact that first- time buyers are now back with renewed vigour- numbers are now at a seven-year high. Investors are also looking to snap-up these homes as they are seen to make the best buy-to-lets.
The reduction in the amount that individuals will pay in stamp duty is also seen as being highly attractive for those looking to move to a bigger property.
…and The Bad
You would be forgiven for believing that there would be an outpouring of joy due to the fact that the asking prices of first-time houses has recently increased. It is, however, little consolation, that the prices of those second homes has also risen sharply.
Inevitably this could lead to problems for these second-time buyers obtaining a mortgage due to the fact that ‘affordability tests’ have recently been brought in an attempt to curb irresponsible lending by banks.
If you are to get through these tough new tests then you will need to prepare for the tests but you will also need to ensure that your spending is cut right back and reined in.
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