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Rising Age Of The 'second-Stepper': Couples Are Stuck In First Homes Until They Hit 40

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http://www.dailymail.co.uk/news/article-2407576/Rising-age-second-stepper-Couples-stuck-homes-hit-40.html

Five years ago, the average age a second home was bought was 35

People have little equity in their home, which makes a bigger mortgage difficult to get

Families are struggling to move up the housing ladder with many trapped in the first home they bought.

Figures show that the average age of a ‘second-stepper’ has risen to 40. Five years ago, the average age at which buyers moved on to their second home was 37.

Many former first-time buyers looking to upsize because they now have children bought their flat or house before prices crashed in 2007.

If only we could figure out the problem of why people can't afford bigger mortgages if only there was a solution!

It appears that house prices have hit a brick wall with the maths of affording a large mortgage now becoming impossible for the average earner.

Still house prices can only go up!

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Yet buying a house gives you freedom, renting traps you for ever...

I think neither buying or renting (in the UK) are particularly good. Rents are either so high such that you end up renting something too small, or hours from work, so 50% of your income doesn't instantly go to a land lord, or purchase a tiny home, or one hours from work, whilst taking on crippling amounts of debt.

I can't see anyway to win (partially maybe i.e. purchasing a home in a much cheaper area with substantial savings, having toughed out cramped, crappy living conditions for several years), landlords, bankers, and politicians have us by the throat, whilst we wait (and it could be a long time) for the madness to finally implode in the face of all the meddling.

I believe everyone is going to lose, I think it's a question of aiming to lose as little as possible.

Edited by GradualCringe

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Stuck?

I don't think advisors have to advise on the interest-capital split of the monthly repayment across the mortgage term (and if interest rates rise). As interest payments are weighted towards early years this creates a problem if house prices are flat to falling because even after a few years little capital will have been paid off. It's possible to do the maths but it would shock most people how little they are paying off. Or they could look at the mortgage statement?

Worse though. Some from 2007/8 vintage might be in negative equity still.

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There is another gulf arising as well.

Many of the younger people I know are buying flats as their first home. When the housing bubble bursts flats will be worst hit and they will find it very difficult to move up the ladder IMO.

Imagine having a 3x joint income mortgage on a 1 or 2 bed flat when this bubble bursts :o

This isn't France, you can't bring up a family in a British flat.

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This isn't France, you can't bring up a family in a British flat.

Some try. When we were renting an "executive apartment for modern living" in the UK there was a young family in the building. Seemed very nice, though the last time we heard hubby was him shouting "I've had enough of your shit, bitch. Get a ******ing lawyer I want a divorce" just after New Year. This was followed by door slamming and the sound of a car screeching off.

And children crying.

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Some try. When we were renting an "executive apartment for modern living" in the UK there was a young family in the building. Seemed very nice, though the last time we heard hubby was him shouting "I've had enough of your shit, bitch. Get a ******ing lawyer I want a divorce" just after New Year. This was followed by door slamming and the sound of a car screeching off.

And children crying.

Perhaps 'Crazy b*tch - The Musical' was on the telly?

Joking aside, that sounds very sad.

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No use house prices going up when wages are not going up.....but wait, interest rates are going down and the pound is falling.....still lots of capacity for rising prices, restrict the building, extend the debt and import the money. ;)

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Some try. When we were renting an "executive apartment for modern living" in the UK there was a young family in the building. Seemed very nice, though the last time we heard hubby was him shouting "I've had enough of your shit, bitch. Get a ******ing lawyer I want a divorce" just after New Year. This was followed by door slamming and the sound of a car screeching off.

And children crying.

Oh no that sounds so sad

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5 years ago people moved at 35 now they move at 40...in 5 years that will be 45....aka...no one is moving/buying houses because of the insane prices and cost of living.

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I'm mid-30's with 2 children under the age of 2.5 (hence being on HPC on a Saturday night!)

I was fortunate enough to buy in 2003 and got a relatively good deal on a house. Therefore now mortgage free.

Also been able to save a significant amount of money too whilst we were both working.

However my wife now only works part time so our income is much lower.

Ideally we'd now buy a bigger "family" home, we currently have a perfectly adequate 3 bedroom house which would be fine. Yet anything like I or my wife grew up in (houses owned by lower middle class parents) in the city we live in cost well in excess of £600k.

We had friends over today in the same position and of the same view. We are both quite bitter about the fact we either have to borrow recklessly or bring our kids up in housing far worse than we grew up in despite earning more than our parents ever did and saving like mad.

I fully appreciate there are people in far, far worse situations so I'm expecting zero sympathy.

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Massive potential stress (as per previous post eg) bringing up a family in an executive luxury flat designed for a 'professional' couple. And more galling when you see older couples who earned less than you in their lifetime rattling around in a 'family' home that you have no chance of buying at today's prices.

There are two parts to this property ladder thingy.

1 building up enough capital to move up the ladder.

2 waiting for the old people in the house you are going to buy to die.

When old people die they don't take their house with them and usually the house is then occupied by some one younger ie some one who isn't dead.

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Interesting, Thanks. And if you wanted to buy the house you own now, could you buy it, assuming you have equivalent salaries to those you had in 2003 ... I assume you have been promoted / moved for better job etc in the last ten years so could probably buy it today on increased salaries (both working) compared with 2003. Just curious to see if the situation has got even worse over the last decade.

Oh and well done on becoming mortgage free.

Thanks.

I suppose how you define afford.

We bought for £135k in 2003 (though others were going for £160k at the time)

House identical to ours just sold for £240k in 2013.

We were earning roughly £35-40k combined when we moved in. Same jobs probably get paid about £42k now combined.

So salaries increased by 10% over 10 years and housing by about 50%.

But also rent, food, utilities, student debt, insurance, fuel etc are all vastly higher than in 2003.

Plus I was getting 5% on savings so my deposit wasn't being massively inflated away.

In summary people 10 years younger than me are utterly screwed.

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Got to say that's what I thought too. I guess this is looking at the subset of those who managed to buy earlier than that and what happens to them.

There was a BBC News story yesterday, which at least had a promising start. Not celebrating HPI, but looking at it being more of a problem issue with cost for upsizers. Anyway it's all a total joke, and getting worse for younger non-owners all the time. Second steppers should have less desire to step up, and force some correction.

At least they've got it better than younger non-owners, who unassisted from BoMaD and HTB, are looking at buying their first home at around 40 years of age, if they save as hard as they can and keep their jobs.

31 August 2013

Homemovers in Scotland face biggest prices increase

Homeowners in Scotland who are moving to a new property have seen the biggest increase in prices in the UK over the last decade, a new study has found. Figures from the Bank of Scotland showed the average price paid by those moving home had increased by 54%.

So called "second steppers" paid an average of £170,534 in the year ending June 2013, compared with £110,952 in 2003. The rise in Scotland is greater than anywhere else in the UK. The latest figures were revealed in the Bank of Scotland Homemovers Review, which found it had got slightly more affordable for people to move up the housing ladder to their second home in the last year. But the situation for homemovers was still much harder than it was a decade ago.

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I'm mid-30's with 2 children under the age of 2.5 (hence being on HPC on a Saturday night!)

I was fortunate enough to buy in 2003 and got a relatively good deal on a house. Therefore now mortgage free.

Also been able to save a significant amount of money too whilst we were both working.

However my wife now only works part time so our income is much lower.

Ideally we'd now buy a bigger "family" home, we currently have a perfectly adequate 3 bedroom house which would be fine. Yet anything like I or my wife grew up in (houses owned by lower middle class parents) in the city we live in cost well in excess of £600k.

We had friends over today in the same position and of the same view. We are both quite bitter about the fact we either have to borrow recklessly or bring our kids up in housing far worse than we grew up in despite earning more than our parents ever did and saving like mad.

I fully appreciate there are people in far, far worse situations so I'm expecting zero sympathy.

Well done....two wonderful children and a paid for three bed house, you are both certainly blessed, be thankful for what you have got and use your resources towards trying to do your children well....what amount will they need to 'succeed' in their futures?........just because someone earns more doesn't mean they are worth more or even deserve more.....good luck. ;)

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Imagine having a 3x joint income mortgage on a 1 or 2 bed flat when this bubble bursts :o

This isn't France, you can't bring up a family in a British flat.

Ease of selling leasehold flats

I'm so glad that I was able to sell my 1 bedroomed ex-LA flat when I did. Ideally, I ought to have sold it in c.2007 and suck up the £2.3k early redemption penalty on the mortgage. I had a 3.5 x mortgage on that grotty place. Work situation wasn't great and felt very vulnerable with that mortgage on it. Had to come down £10k on the EA's inflated asking price to £76k mind.

My ex-neighbours are currently trying to sell their flat. Theirs is 2 bedroomed so worth more than mine. Currently on for 'offers in excess of £100k'. They paid £93k for it in 2006. Unfortunately for them, on the right column of the Rightmove ad there is a 'Property Sold Nearby' section indicating for neighbouring properties sold for. If an interested party sees this information, they will notice that mine sold for £76k 3 years ago, even factoring in a inflatory increase in house prices, this probably represents poor value for money. I bet even the EA informed them of this fact, which probably went down like a cup of cold sick.

After the 2007-8 credit crunch, I noticed that the asking prices of 2 bed leasehold flats and cheaper end 2 bed freehold houses were widening. They were fairly similar in 2002-3. Today on Rightmove, optimistically priced flats, like my ex-neighbours' flat, can linger for months.

Families in British flats anecdotal.

After I sold up, I moved into a private rented ground floor 2 bedroomed flat in a block of 6 (One double bedroom, one single). Each flat has bugger all storage space - I use my second bedroom as a 'storage cupboard'. Tenants in the other flats have been fairly transient (in fact, I think one tenant moved out yesterday).

In 2010, The space under the stairs was void, save for a forlorn cardboard box. Today, it is littered with push chairs, children's sledges/bikes and sometimes an adult's bike...despite there being a bike storage area outside (albeit not that secure). Seems that more families are having to put up with private rented flats. Perhaps until they are offered a council/HA house or a reasonablly affordable private house.

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Interesting, Thanks. And if you wanted to buy the house you own now, could you buy it, assuming you have equivalent salaries to those you had in 2003 ... I assume you have been promoted / moved for better job etc in the last ten years so could probably buy it today on increased salaries (both working) compared with 2003. Just curious to see if the situation has got even worse over the last decade.

Oh and well done on becoming mortgage free.

He paid it off on account of being a highly paid public sector contractor during the brown boom years and into the credit crunch before cutbacks were made, if I recall correctly

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He paid it off on account of being a highly paid public sector contractor during the brown boom years and into the credit crunch before cutbacks were made, if I recall correctly

Not quite right - I've done much better under the coalition from public sector clients as they've outsourced so much they can no longer do it themselves.

And never that highly paid, never earned enough to pay 40% tax.

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Not quite right - I've done much better under the coalition from public sector clients as they've outsourced so much they can no longer do it themselves.

And never that highly paid, never earned enough to pay 40% tax.

...are your employees now being taken on with low wage or zero hours? ;)

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Got to say that's what I thought too. I guess this is looking at the subset of those who managed to buy earlier than that and what happens to them.

An odd target for an article, I find it hard to find much sympathy for those who can't 'move up the ladder' when there are so many more for whom 'getting on the ladder' at all is impossible.

Perhaps those are undeserving of any attention having already chosen an iphone over a home, a choice all young people have to take at some early point in their lives as all daily mail readers will know.

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Many of the younger people I know are buying flats as their first home. When the housing bubble bursts flats will be worst hit and they will find it very difficult to move up the ladder IMO.

Imagine having a 3x joint income mortgage on a 1 or 2 bed flat when this bubble bursts :o

This isn't France, you can't bring up a family in a British flat.

If you could explain this concept to my 1950s-born parents I'd be most grateful. I've just had a weekend of "when are you going to buy?" pressure while visiting them. It doesn't help that the newspaper they have read for the last 40 years (the Times) has gone into property hype overdrive recently. Today there was even a cut-out-and-keep guide about how to buy your first property.

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Just ask them if they could buy their first house today on their equivalent salary.

Never mind the equivalent salary, they would struggle to buy their first house today (NW London terraced house bought at the age of 24/25) on their current salary despite my father earning several times what a 25 year old in his field would make now. The gulf in opportunity is hilarious.

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An odd target for an article, I find it hard to find much sympathy for those who can't 'move up the ladder' when there are so many more for whom 'getting on the ladder' at all is impossible.

Perhaps those are undeserving of any attention having already chosen an iphone over a home, a choice all young people have to take at some early point in their lives as all daily mail readers will know.

I have sympathy for both groups. It's no more fun bringing up a couple of kids in a one bedroom flat in Stabsville due to negative equity or unaffordability, than living in shared house in your mid 30s because you can't afford your first place. Both groups should be natural allies of each other really.

Plenty do realise the utter insanity of the so-called market - but are trapped just the same.

Edited by StainlessSteelCat

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