Although, the property market in the UK has seen improvement in the past few years, buyers and sellers in investment properties are troubled by a lack of confidence, a new research indicates. The research conducted by Lloyds Bank has found that first timers in investment properties are finding it difficult to sell their property this year amid concerns about the economy. Those stuck in their first investment properties have hope as the latest figures show that the market is looking up. It means the first timers or young families can now move up the property ladder, try for their secondary property and expand their portfolio through investment properties.
Increase in house prices have raised the equity of those who are living in their first houses and 45% of such house owners feel that their equity position has improved over last year. Approximately a third of the young house owners want to continue with their first investment properties rather than move ahead and buy second property and this may result in the shortage of first time buyers in the market.
Typically, the second steppers in the present times have bought their first investment properties in 2012 when the average price of a first time houses was £140,004. It has emerged from the survey that the gap between the sale price of their current property and the cost of their desired house, which is typically a detached property, is £126,000. This amount can be reduced by 83% by selling their houses. It means the second steppers in investment properties will have to arrange £21,005 more.
Apart from these, record low mortgage rates and affordability have also helped the second steppers in buying their dream property. But, approximately 39% of the second steppers in investment properties think that it difficult to sell their property compared to about a year back. Approximately 26% of those surveyed are concerned about economic uncertainty and 29% to 32% of them are struggling for the deposit amount.
‘Second steppers are yesterday’s first time buyers and the conditions to help them climb to the next rung on the property ladder are better than they’ve been for over four years. Despite this, many still feel that things are tough out there and that it’s getting more difficult to sell your first house and move up the ladder,’ said Andrew Mason, Lloyds Bank mortgage director.
‘Second steppers are telling us that finding the right property can be tough, and because of that, they’re delaying their move. However, if too many second steppers hold out for a long time for their dream house this could reduce the availability of houses for first time buyers and slow the market,’ he pointed out.