Good news abound for those on the second time buyer ladder, with the trade-up gap setting a new record at £67,761.
Rightmove recently released a study on average asking prices of close to 3 million properties on the basis of those looking to purchase their second house with 3 bedrooms and already owning a 2 bedroom home. Price growth on 3 bedroom properties has managed to outstrip those on 2 bedroom flats year on year.
Outside of London has seen asking prices increase 20% nationwide in comparison to five years ago whilst a 2 bedroom flat has risen to 15%. In the last 12 months, flat prices have risen by 3% with 3 bedroom homes rising by 4%.
In the East of England, the two to three-bed trade up gap is now over £100,000 for the first time, while the biggest trade up gap is in the South East, at £121,295. Those looking to trade up from the smaller property purchased five years back will find it harder to be able to afford the next step up the property ladder due to sector pacing being different across the UK.
People that genuinely require the extra space and are struggling to trade upwards may have to widen their intended search area in order to really make the most of their money. Failing that they may have to have a compromise on their intended property and look into terraced properties other than detached.
The cash jump rises significantly from 3 to 4 bedroom properties. This is largely due to four-bedroom properties having additional facilities like extra bathrooms, larger outside garden properties, extra room garages and an extra bedroom. Usually, homeowners have a tendency to stay in a second property for longer periods and so more people may have built up enough equity to make the jump into their intended forever home.
Taking Over FTB
The remaining 2020 and upcoming 2021 windows seem set to see a reversal of the first time buyer market dominance and an emergence of existing homeowner moves. This is mainly down to searches for space and life re-evaluation due to the effects of 2020’s pandemic.
Many property owners have either no mortgage or loans giving them an affordability factor in movement on property. Many households look to move away from city life to more rural surroundings and better value for money. Existing owners also tend to be over 45 with mostly no mortgage at all, which could result in 2021 seeing a huge surge in cash only purchases looking to buy property in Stockport.
March’s lockdown has unlocked unforeseen demand for housing moves, with demand looking to be supported through a second spike in new cases and restrictions being tightened in the near term. This will no doubt galvanise those with solid equity and low to no mortgages to act quickly to secure required living.
For buying a property advice, contact the team at Joules to find that second purchase that becomes your forever home.