8th December 2014
More than four million young homeowners are stuck in properties with little hope of moving in the coming two years, claims new research from Santander.
The lender found that the main barrier to moving up the ladder is the need for the value of their current property to increase, as cited by 63% of respondents.
The findings found that of the homeowners aged 18 to 34 who would like to buy their next home within the coming 24 months over two thirds, at 71%, think it is unrealistic that they will be able to do so.
The survey also revealed that just half of homeowners in this age group expected to live in their first property for more than five years but almost 60% have already had to do so.
With the expectation of moving on quickly from their first home, 89% of young homeowners made compromises on their first purchase in order to get a foot on the property ladder, which many are now stuck with.
The survey also found that almost two thirds, at 63% compromised on the location of their property, while 55% compromised on the size and 47% settled for fewer bedrooms than they would have liked.
A further 53% bought their first property with less outdoor space than they would have liked while 54% say they compromised on the style of the property.
Miguel Sard, head of mortgages at Santander said: “There are a lot of ‘frustrated middle movers’ who made compromises on their first homes and have now been stuck with these for longer than they wanted, as they are finding it difficult to move up the property ladder. There are a lot of great deals to be had for buyers at the moment, however, both in terms of properties and mortgages, so it’s worth looking around.”
Of those homeowners aged 18 to 34 who would like to purchase a new home in the next two years, the average time they think they will realistically have to wait until they can do so is over three years.
Whilst the main barrier is the need for property prices to increase, 28% blame a lack of suitable properties on the market and 51% say they need to do work on their current home to increase its value before putting it on the market.
A third, at 34% say they are waiting for property prices to fall further. Others see wider economic issues as barriers to purchasing a new home, with 53% citing personal fears about the state of the economy as an obstacle, while 38% are concerned about the stability of their own or their partner’s job. Upfront costs are also a big issue, with 58% saying they need to save for a bigger deposit.