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Return Of The Second-Steppers

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The number of people estimated to have moved up the housing ladder in 2013 reached a three-year high last year, a survey showed, as rising house prices boosted the amount of cash they had tied up in their existing property. Around 337,500 existing home owners with a mortgage moved house last year in the UK, marking a 3 per cent increase on 2012 and the highest annual total since 2010, according to Lloyds Bank's home movers review. The report pointed to rising house prices as helping to increase existing home owners' equity levels and help free them up to climb onto another rung of the property ladder. On average, existing home owners are now putting down a deposit of £76,398 on the property they are buying, which is a 6 per cent increase on a year earlier and equates to around one third of the purchase price of the home they are moving into. Home movers in London, where house prices have been surging ahead of the rest of the country, typically put down a deposit of almost double the national average last year, at £144,505. This is almost four times the average deposit put down by home movers in Northern Ireland, where house prices have only just started to stabilise, at £36,951.

A big surge in people looking to buy their first home last year has provided second steppers with more first-time buyers to potentially sell their home to, helping to get previously stuck housing chains moving again. There were around 265,000 first-time buyers in 2013 according to Lloyds' estimates, a figure which was up by around a fifth on 2012.

The Government's new flagship Help to Buy scheme, which launched in October and has been signed up to by lenders representing most of the mortgage market, gives both first-time buyers and home movers with 5 per cent deposits a helping hand to buy a property by offering them state-backed mortgages. But critics of the scheme argue that it is adding to the upward pressure on house prices as confidence returns to the market and encouraging borrowers to over-stretch themselves. They say that the Government should instead be concentrating on increasing the supply of homes for people to choose from. Link

Hey baby! We can also cut back on costs to shift our debts and pay less to borrow from changing credit cards to moving our mortgage.

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Surely rising house prices stop people moving house.

My £200k house rising 50% gives me a house worth £300k.

Unfortunately it makes the £400k house I was going to move to worth £600k and even further out of reach.

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Surely rising house prices stop people moving house.

My £200k house rising 50% gives me a house worth £300k.

Unfortunately it makes the £400k house I was going to move to worth £600k and even further out of reach.

Exactly......having to borrow twice as much. :o

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Surely rising house prices stop people moving house.

My £200k house rising 50% gives me a house worth £300k.

Unfortunately it makes the £400k house I was going to move to worth £600k and even further out of reach.

Yes that is true and easy for anyone who see houses as over priced to see. However in most peoples eyes rising prices give people more confidence that prices will continue to rise and they feel more comfortable increasing their leverage in their bet (although none see it as a bet!) on a rising asset price.

Ah, and another bullish factor when prices are rising is that banks are far more willing to lead greater amounts! So, yes you will need to borrow more but will have easier access to those funds. As most people only concerned is their monthly payments everyone is happy! :ph34r:

Edited by renting til I die

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So it wouldn't be just another pack of lies would it. The UK press and media would never stoop so low - again.

Marc Page, Lloyds Bank mortgages director, said: 'As house prices have increased over the last 12 months, we're seeing more people look to take the next step on the housing ladder.

Ah thank goodness a mortgage director says it's so so it must be so.

Edited by billybong

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Surely rising house prices stop people moving house.

My £200k house rising 50% gives me a house worth £300k.

Unfortunately it makes the £400k house I was going to move to worth £600k and even further out of reach.

It's not a property ladder it's a debt step.

The percentage increase in the existing house price is the percentage increase in debt to step up.

No HPI = £200k to £400k = £200k to fund

50% HPI = £300k to £600k = £300k to fund i.e. 50% more.

Not forgetting the interest on the extra 50% doubling it to 100% over a mortgage term. Which is why the bankers love their HPI and want people to borrow more to push prices up.

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Surely rising house prices stop people moving house.

My £200k house rising 50% gives me a house worth £300k.

Unfortunately it makes the £400k house I was going to move to worth £600k and even further out of reach.

This is presumably why you see loft conversions going on everywhere, or at least around here, where prices have been daft for years and keep on getting dafter. Far cheaper way to add a room or two.

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This is presumably why you see loft conversions going on everywhere, or at least around here, where prices have been daft for years and keep on getting dafter. Far cheaper way to add a room or two.

On a property worth 500k, you have to pay £25k in stamp duty - nearly enough for a loft conversion.

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This is presumably why you see loft conversions going on everywhere, or at least around here, where prices have been daft for years and keep on getting dafter. Far cheaper way to add a room or two.

....but would a property where it was possible to extend be a first step property?.......would it be a place you would want to spend 25 years living in basically stuck? ;)

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Remember even though prices have inflated on the target property many people will be getting a new mortgage at better terms (for next 2 years anyway).

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Remember even though prices have inflated on the target property many people will be getting a new mortgage at better terms (for next 2 years anyway).

And there's no reason why that shouldn't continue indefinitely, every time they remortgage or move up another step.

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Surely rising house prices stop people moving house.

My £200k house rising 50% gives me a house worth £300k.

Unfortunately it makes the £400k house I was going to move to worth £600k and even further out of reach.

A lot of people don't see it like that 10% deposit on a £200k house = £20k equity. 50% HPI = £120k equity. They've 'made' £100k on their first purchase so feel confident that rinse and repeat will work.

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