Stagnant Second Stepper Market Scuppers First Time Buyers
Home owners looking to move up the housing market are feeling the brunt of the relatively flat market in 2012, according to the findings of the Home Movers Review by Lloyds TSB.
Despite the FLS showing signs of success, Lloyds believe there were 319,000 home movers in 2012, a similar amount to 2011. The bank also predicts the typical second stepper has equity of £11,500, 7% of the average house. This is compared to a home mover in 2005 that had equity of £45,000. Moreover, the average mover in 2012 required a deposit of £61,743 which is a rise from £38,866 in 2002.
This fall in equity and required deposit to move house may have an impact on the already slow market. Moving house costs roughly £9,000 and many only have equity of £11,500. As a result, many looking to move up the housing market are unable to do so as they have little left for a deposit. Furthermore, for those who bought during the housing market peak in 2007, some are facing the prospect of having less equity or even a negative amount.
Lloyds TSB housing economist Nitesh Patel has commented that as second steppers are struggling to move, this may have a ‘considerable knock-on impact for potential first time buyers due to the resulting shortage of properties available on the market.’
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