A recent survey has revealed that many second-time buyers who would like to move cannot do so because of negative equity.
Online PR News – 30-July-2013 – London – The survey, called the Step-Up report published by the Post Office revealed that over 25% of buyers who want to buy their second home could not do so. The reasons were because of negative equity in their current properties and stagnant house prices.
Twenty eight per cent of buyers were in negative equity because they bought at the height of the property boom and their property either has not increased at all or has not increased significantly in value for them to move. Stagnant house prices across the UK have also impacted the property market with house values and markets in different regions remaining stagnant. In some areas in the UK, property prices have actually decreased in real terms.
Other contributory factors include the high cost of moving and the costs involved which include estate agents’ fees, legal fees and higher stamp duty tax that will need to be paid on more expensive properties. Thirty per cent of second-time buyers were deterred from buying their next property because of the costs. It is estimated that an average of £7,279 is required to cover stamp duty tax and solicitors’ fees. This figure rises to over £12,000 for buyers living in London.
There is also an indication that there are not enough available homes on the market to give a varied choice to buyers who want to move on. The report also revealed that there is also a lack of house buyers in the. Seventeen per cent of sellers are unable to sell their properties because they cannot find a buyer for their home.
Prices have fluctuated, fallen and remained stagnant in the wake of the economic crisis which means that there is a lack of equity in the home to first-time buyers to move to the next property. Prior to the crisis the value of properties was rising steadily which allowed first-time buyers to move onto higher priced, second properties more easily.
Fleur Rowan from What House? said: “As well as first-time buyers finding it challenging, those who want to move onto a larger property and upsize their home are finding it difficult in this current market for a number of reasons. We specialise in new homes where house builders are actively helping second-time buyers, as well as first-time buyers, to move to their next home. There are many incentives and schemes to help people sell their property and help with various selling, legal and moving costs.”
Notes to Editors:
What House? is a leading property website that features thousands of new homes in the UK. It also provides the latest property news, valuation of homes and property and mortgage advice. Over the last 31 years, What House? has held their annual What House? Awards, which are the longest established New Homes awards in the UK recognising UK house builders and developers across 21 categories.