Newspaper article The Evening Standard (London, England)

FAMILIES CAUGHT IN TRADE-UP TRAP; COST OF MOVING FROM FLAT TO HOUSE TOO HIGH FOR MANY LONDONERS; 'People Are Voting with Their Feet and Moving out of the City'

Newspaper article The Evening Standard (London, England)

FAMILIES CAUGHT IN TRADE-UP TRAP; COST OF MOVING FROM FLAT TO HOUSE TOO HIGH FOR MANY LONDONERS; 'People Are Voting with Their Feet and Moving out of the City'

Article excerpt

Byline: Jonathan Prynn Consumer Business Editor

THOUSANDS of Londoners are "trapped" in their cramped first flats because of the huge cost of trading up to a family home, a new study reveals.

The price "chasm" between a two-bedroom flat and a three-bed house in the capital now stands at an average of just over PS135,000 -- more than four times the typical London salary, according to the research.

In a "hidden housing crisis", many couples are being forced to bring up children in unsuitable overcrowded conditions, of else uproot them from communities and schools to move to cheaper areas, or leave London altogether.

The "trade-up gap" has widened dramatically over the past three years, from PS104,000, as the property boom lifts the second rung of the ladder ever further out of reach of young homeowners.

The research was carried out by estate agency Savills.

Lucian Cook, its director of residential research, said: "A lot of Government policy is focused at first-time buyers, but the people trying to trade up face problems that are just as great.

"They need to fund the difference with additional mortgage borrowing, and that is not easy in the current climate of the mortgage market review and additional stress-testing by lenders." The costs facing second movers, particularly stamp duty, are also greater than for first-time buyers, he added.

In nine London boroughs, including Barnet, Wandsworth, Islington and Tower Hamlets, the gap between two-bed flats and three-bed houses exceeds PS200,000. In Kensington and Chelsea it stands at an extraordinary PS1.75 million.

The smallest difference in prices is in Newham, where it is just PS28,308. The average age of a "second mover" is now 35, compared with 31 a generation ago, according to the Council of Mortgage Lenders. This is likely to rise to 42 for today's crop of first-time buyers, a recent study from HSBC has predicted.

Magazine journalist Roger Lawrence, 32, who is married with a 19-month-old son, said it was "incredibly frustrating" to see the value of their two-bedroom Muswell Hill flat rise so fast, but to still not be able to move to a house with a garden in the same area. …

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