Newspaper article The Evening Standard (London, England)

Second Rung on Property Ladder Proves out of Reach

Newspaper article The Evening Standard (London, England)

Second Rung on Property Ladder Proves out of Reach

Article excerpt

Byline: Kate Hughes

[bar] LL we ever seem to hear about are the challenges faced by first-time buyers. They can't get onto the housing ladder, prices in the capital are running away from them, lending criteria have tightened up, it's all very difficult indeed. But what about the second-steppers -- those who have fought their way, tooth and nail, into their first home only to find that life, the economy and everything has rapidly made their situation very different indeed? Things can change in the blink of an eye, especially in London, and not only have your own circumstances probably altered beyond recognition in the years since you embarked on the property roller coaster, but unfortunately so has the economy. It is widely accepted that second-steppers are facing the toughest market conditions for up to a quarter of a century, far worse in fact, than those for first-time buyers.

On average, first-time buyers are borrowing 4.1 times their gross annual salary to secure that first crucial rung. It's high, but not as high as the 4.7 times that second-steppers are promising to repay, research from Lloyds TSB has found -- a figure up from just 3.2 times in 2002. In London it rises to 5.9 times.

And the deposit story isn't any better. The average deposit for a homemover was [pounds sterling]36,280 in 2002. By 2012, it had gone up by a massive 70% to [pounds sterling]61,536.

Yes, property prices in the capital have also soared during that time, regularly bucking the post-creditcrunch trend for the nation as a whole, but it all means that second steppers now have an average of just 5% of the average price of a typical second home compared with a huge 44% only seven years ago.

The reality is that homeowners are now forced to stay in their homes for longer, on average, than they would have done if the market were more buoyant. …

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