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Now second-time buyers face huge mortgage leap as cost of trading up rises three fold

Published 09th Jun 2012

The cost of trading up from a first-time buyer property to a second home has almost tripled in the past decade, says a survey.

And one in six of those trying to move up the property ladder has to turn to their parents for help, asking for nearly £13,000 on average.

The price difference between a typical first-time buyer flat and the semi-detached home desired by many ‘second steppers’ has risen from £14,000 ten years ago to almost £41,000, said the Lloyds TSB survey.

While most of the would-be movers said they would use savings or equity in their current home to fund their move, 16 per cent said they would consider asking their parents for help – typically needing £12,746.

The researchers said nearly half of first-time buyers live in flats, which average £148,502 in value.

The typical price for a semi is £189,312 – meaning second steppers face a 27 per cent premium to trade up.

Second steppers in the South East face the largest premium at 52 per cent – costing them £84,407 to buy their second home.

Londoners face a relatively average premium of around 27 per cent – but the cost works out at £97,916. Trading up in Wales is just over £6,356, or 5 per cent, by comparison.


The price difference to buy a second home was:

£26,423 in the North;

£17,815 in Yorkshire and the Humber;

£36,892 in the North West;

£30,765 in the East Midlands;

£32,049 in the West Midlands;

£30,653 in East Anglia;

£44,828 in the South West;

£40,810 across England and Wales.

Stephen Noakes, Lloyds TSB mortgage director, said: ‘Second steppers have been hardest hit by the subdued housing market, so it is unsurprising they are struggling to fund the trade up to their second home.

‘Parents have long been helping to fund their children’s first home but many are now having to provide further support as they move up the ladder.’

Researchers used Land Registry figures and interviewed 400 people taking their second step on the property ladder.

A survey published by Lloyds TSB in February found nearly two thirds of people trying to climb the property ladder from their first home were stuck, due to falling house prices leaving them in negative equity.

Typical costs for a home mover, including stamp duty, mortgage arrangement fees, estate agency fees, surveyors’ fees, conveyancing and removal costs, soared to about £8,922 in 2011 – a 69 per cent rise over the decade – the same study found.

Source: ' ThisIsMoney '

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