Call for your free quote 0800 955 0058

Second steppers need equity gains to fund the £136,000 by trading up

03 Mar 2018 | News|Home Movers

Homeowners taking their second step and trading up to a bigger home need to find £136,000 helped by recent equity gains.

Research from Lloyds Bank shows that home movers buying their next property must find on average £135,985 to trade up, usually a detached house with a price of £347,281.

The typical Second Stepper bought their first property in 2014 when the average price for first time buyers stood at £167,137 and is likely to sell for £211,296.

There have been equity gains in their first home and strong house price growth means they will have £85,877 to help contribute to their next home so second steppers need to find another £50,108.

In London the gap is greater with second steppers selling for £422,329 to buy a detached house for £722,929 making a difference of £300,599.

More difficult to sell their home

Of the households in the research, 35% believe it will be more difficult to sell their home this year with concerns over the economy, the larger deposit needed and shortage of suitable properties.

With competition from buy-to-let investors and reduced supply of suitable properties, home movers are remaining in their existing home and saving for a bigger deposit.

Andrew Mason Lloyds Bank Mortgages Director said, the interest rate rise last year marks the first increase first-time sellers have seen as homeowners and has caused some concern.

Second Steppers are optimistic about the market conditions, which are now better than they’ve been for over five years with low mortgage rates benefiting first time buyers, home movers and remortgage buyers.

Many have been building up substantial equity in their homes and with more first time buyers entering the market, their next move may not be far away, says Mr Mason.

Of the second steppers 48% were attracted to town living with 40% opting for a village location and only 31% intending to relocate to the countryside.

In terms of the type of property, 37% would like a period property, 36% preferring a new build home with a quarter looking for a recently developed or renovated property and only 21% looking to renovate a property.

Staying and make improvements

Of those second steppers 35% think it will be harder to sell their existing property this year compared to a year ago with 29% worried about the uncertain economic climate.

Some 30% feel the deposit size required for moving remains a key challenge and 26% are struggling to find the right property to move to.

Fewer suitable homes could be partly due to older homeowners not downsizing, with higher activity from equity release buyers accessing property wealth using a lifetime mortgage to consolidate debt, for home improvements or holidays.

For many second steppers, if they cannot sell their current home they 40% intend to make home improvements which has increased from only 34% in 2016.

Even so, 40% believe market conditions have improved since last year and 52% feel there are now more first time buyers in the market, up from 43% a year ago.

Of those asked, 52% also think the stamp duty changes announced in the Budget last year will increase the number of first time buyers entering the market even further.

What are your next steps?

Speak to our LCM mortgage advisers if you are planning to move home, buying your first home, remortgaging your existing home to a new cost effective mortgage deal or are a buy-to-let investor.

Learn more by using the mortgage cost calculators, equity release mortgage calculator and property value tracker chart. Start with a free mortgage quote or call us and we can take your details.

For equity release buyers our London City Mortgage brokers can recommend lifetime mortgages allowing you to receive cash from your property to help maintain your standard of living as costs rise.

Use your dashboard to access online mortgage quotes, money off vouchers and start your mortgage application online 24/7 on desktop, tablet or smartphone.


Mortgage Best Buys

These are examples of mortgage products we can approach with many more offering interest rates and flexibility to meet your needs.

1.16% Fixed Rate
60% Loan to Value
£1,525 App Fee
Until 01/11/2022
Reverts to 4.09%
1.17% Fixed Rate
60% Loan to Value
£1,025 App Fee
Until 31/09/2022
Reverts to 3.59%
1.18% Fixed Rate
60% Loan to Value
£1,034 App Fee
Until 31/10/2022
Reverts to 3.59%
1.19% Fixed Rate
60% Loan to Value
£999 App Fee
2-Years Time
Reverts to 3.59%

The latest mortgage news


12 Sep 2022

Fifth of homeowners use mortgage advance to go green

As energy bills are rising 22% of homeowners are using mortgage advances to improve the efficiency of their homes to reduce costs.

26 Aug 2022

Equity released hits record levels as more people access cash from homes

Homeowners accessing cash from their properties increased 26% over the year with over £3 billion of equity release in the first six months.

29 Jul 2022

Home movers drop over a third in 2022 compared to last year

The stamp duty holiday last year produced bumper demand from home movers now down a third but still above pre pandemic levels.

18 Jul 2022

Property market is cooling after sixth house price record

Asking house prices rise for the sixth record in a row to £369,968 as demand to buy continues although at a slowing rate.

Call for your free quote 0800 955 0058

  • IMPORTANT

    Equity Release may involve a Lifetime Mortgage or a Home Reversion Scheme. To understand the features and risks, please ask for a personalised illustration. Equity Release may affect your entitlement to means tested state benefits and will impact on the size of your estate. For Equity Release London City Mortgages charge a fixed fee upon completion of £695. For Mortgages a fixed fee is charged on application. Typically this is from £295 up to £495 for the services selected.

  • WARNING

    Equity Release - Equity Released from your home will be secured against it. Mortgages – Your home may be repossessed if you do not keep up repayments on your mortgage or other loans secured against it. Think carefully before securing other debts against your home. The information contained in this website is subject to the UK regulatory regime and is therefore intended for consumers based in the UK.

    CONTACT

    Address:
    9th Floor, 30 Crown Place
    London, EC2A 4EB

    Phone:
    0800 955 0058

    Email:
    info@londoncitymortgages.co.uk

    London City Mortgages Limited is a registered company in England & Wales under company number 09278987. London City Mortgages Limited is an Appointed Representative (FCA no. 655965) of Blackstone Moregate Limited (FCA no. 459051) which is authorised and regulated by the Financial Conduct Authority. LCM and LCM Equity Release are trading names of London City Mortgages Limited.

    2024 © London City Mortgages.