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Rate rises biggest hurdle for second steppers: Lloyds


First-time sellers view future interest rate increases as their biggest challenge to moving up the property ladder, the latest annual Second Steppers report from Lloyds Bank reveals.

Almost four in ten (39 per cent) suggest that the prospect of at least one interest rate rise this year is the most significant hurdle to purchasing their next property.

One in three (35 per cent) people looking to take their second step up the housing ladder believe it will be more difficult to sell their home this year.

This is down to a combination of factors, including worries over the economy, the size of the deposit they will need and a shortage of appropriate homes.

Around 40 per cent believe market conditions for second steppers have improved over the last 12 months however, with more than half (52 per cent) feeling there are now more first-time buyers in the market.

Lloyds’ study finds that the typical second stepper bought their first property in 2014, and selling today at the average first-time buyer price will see them enjoy almost £86,000 in equity to put towards the next property.

That has grown from £68,629 four years ago.

The average needed to make the step up from first purchase to second home stands at £135,985 for the UK as a whole according to the study, though there are significant regional variations.

In Northern Ireland for example second steppers need to find almost £74,000 to make the move up the ladder, while in London that gap jumps to more than £330,000.

The study also revealed that almost two-thirds (64 per cent) of second steppers have regrets about their first home purchase.

More than a third say they wish they had bought somewhere bigger, while a tenth admit they rushed the purchase and did not look at all of the relevant details.

Lloyds Bank mortgages director Andrew Mason says “Second steppers are optimistic about the market conditions, which are now better than they’ve been for over five years, and with many building up substantial equity in their homes and more first-time buyers entering the market, their next move may not be far away.

He adds: “However, the interest rate rise we saw late last year marks the first increase first-time sellers have seen since becoming homeowners and even though it was small it has caused some concern.”



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