The plight of the first time buyer in the current market is one that is well known but it’s often forgotten that they are not the only sector of the market struggling with the current climate. Just as first time buyers have to deal with the need for big deposits to access the best rates, so too are some second time buyers.
As we hit the 5 year anniversary of the credit crisis, the first time buyers of 2007 may be struggling to make their next move. In fact, figures from Lloyds suggest that so called ‘second steppers’ face the toughest conditions of the last 25 years.
These that bought at the peak of the market in 2007/08 may have seen their equity fall back as house prices have dropped. Lloyds estimates that the average equity position for those borrowers could be just over £9,000, equivalent to only around 5% of average second stepper house prices.
That means that second steppers have to bolster their deposit from savings in much the same way as first time buyers in order to give themselves a chance of qualifying for a mortgage and making their next move. If there is no need to move then they can sit tight and concentrate on increasing their deposit funds but for some a growing family may mean a move is more pressing.
That may mean that they still have to seek help from family to take the next step on the property ladder, even though they may have already had assistance with the first purchase. Just to add to the issue the lack of first time buyers in the market can also mean that selling the existing property is not easy.
It’s another reminder that the difficulties for first time buyers will only ripple upwards and the requirements for big deposits are not only hitting those on the bottom rung.