Homeowners unable to make 'second step'
There was good and bad news for the Westcountry property market after towns in the region recorded opposite ends of the spectrum in numbers of people taking their second step up the property ladder.
According to a study by Lloyds TSB, Torpoint in Cornwall suffered the biggest drop in "second-steppers", with a 52% decrease since last year.
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Dawlish in Devon, meanwhile, recorded a 44% drop.
Nationally, two-thirds of towns saw a fall in homeowners moving up the ladder.
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However, the study was not uniformly gloomy, with Bude reporting the biggest annual percentage increases in second-stepper property sales at 60% on last year.
Andy Goundry, a partner at Truro-based Goundry Pearce and fellow of the National Association of Estate Agents, said the "second-stepper" issue needed tackling.
"At the moment people are staying put in their first homes," he said.
"There are two reasons for that, firstly that a lot of second steppers have bought their homes in the last five years and in that time the value of their properties has gone down.
"They are finding that they simply don't have the deposit available to make the jump upwards, even if they can afford the bigger mortgage payments.
"The other issue is that under new lending rules, there are second steppers who find that they used to meet the banks' lending criteria, but now they do not."
Mr Goundry said the log jam in the market was storing up problems for the future.
"It is creating a bottleneck.
"The frustration is that while we all hope the economy improves, the danger is that when it does there will be a lot of pent-up buyers in the market and there will be a boom.
"What we really need is a good steady housing market."
According to the study, some 374 out of 577 areas surveyed across England and Wales saw an annual fall in sales of second-stepper homes in the first seven months of 2012, representing the biggest number of cities and towns to see a drop in three years.
The study found that the price of a typical first-time buyer home has fallen by 16%, or more than £33,200, on average over the last four years in the places that experienced the largest falls in second stepper sales.
Meanwhile, a separate study published by the property website Rightmove found that a fifth of homeowners who bought between 2007 and this year believe their property is now worth less than they paid for it and 17% of them are in negative equity.
Comments
by SmartyC
Wednesday, October 31 2012, 12:51PM
“"Estate agent predicts boom" shocker!! Laughable.
And just how does Mr Goundry predict his "boom" will be financed? Because it won't be by the banks, who are running scared having being nearly bankrupted by their policies of lending absolutely ludicrous amounts of cash to people on the basis that house prices only go up.
No money, no boom.
At the moment what we're seeing instead is a gradual deflation of the market back to a level that normal people can actually afford to finance.
And when interest rates go up (and they have to eventually), all those people only able to cover their ludicrous mortgages because they're paying virtually no interest will sadly come unstuck, then we'll see the exact opposite of a boom. We'll see a property price collapse.
And for normal people that buy houses to live in and raise families, rather than as part of a highly leveraged profit making ponzi scheme, the inevitable crash back to property price realism can't come fast enough.”
by DoUntoOthers
Tuesday, October 30 2012, 2:17PM
“I'll consider moving from my first house when it doesn't cost me several thousand pounds to do it.”
by Stork
Tuesday, October 30 2012, 12:31PM
“There won't be a boom. People might think there is, but mortgages will be tightly controlled for years and years to come. The days of "have as much loan as you want" are over. We will eventually get back to mortgage limits of three times your salary. Any government that allows any higher borrowing will shoot itself in the foot. The political Parties know this, and won't let another property/financial crisis to happen on their watch.”