Reaching the second rung of the property ladder would prove hard for a third of hopeful homeowners, new research from MoneySuperMarket shows.
The study reveals that 34 per cent of people looking to upscale their home in the next five years would struggle to achieve that goal with ever growing house prices and high moving costs standing in their way.
The average cost of moving home for current mortgage holders has been estimated at £10,549.
Money is the main barrier to moving on up the property ladder with by almost half (47 per cent) of homeowners saying they cannot afford a new home at the current prices and 43 per cent admitting they would not be able to afford the cost of moving.
Kevin Mountford, head of banking at MoneySuperMarket comments:
“Getting a foot on the property ladder in the first place can be hard work, but for many homeowners it’s just as difficult to take the next step. House prices have rocketed in recent years and tougher borrowing rules have made the search for a mortgage slightly harder. It is vital for a healthy housing market that people are able to move up the property ladder otherwise the whole system can come to a grinding halt, leading to a shortage of property. As a result, second steppers can’t afford to be complacent when it comes to deciding whether to upsize their home. Planning a budget will be crucial, and really taking the time to sit down and work out exactly what costs will be involved is essential.
“The good news for those looking to move is that there’s a great deal of competition in the mortgage market at the moment. We’ve seen a huge drop in fixed mortgage rates over the past few years, some with manageable fees. Perks such as free legal costs and free valuations on properties are also offered by some lenders in order to get customers through their doors. As such, there really hasn’t been a better time to get a mortgage.
“However, it’s important to always look at the bigger picture when searching for a new mortgage. Don’t get lured in by a headline rate, and work out the total cost you have to repay over the term of the offer before agreeing to a deal. Also, think about whether you want a fixed or variable rate deal, if you opt for a variable rate mortgage, you need to ensure that you will be able to afford your monthly repayments if and when interest rates do rise as they won’t stay at this level forever.”
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