Abbey has warned that the increasing price of houses, are forcing second time buyers out of the market.
According to the lender, nearly half of all homebuyers still living in their first home say they cannot afford a bigger mortgage, and are unable to move house. Abbey believe that if second time buyers cannot afford to move up, it could affect the traditional house buying chain, in which people generally move to a bigger property, then downsize when children leave home.
They have found that other barriers to moving house include a lack of suitable or larger properties on the market, a lack of suitable schools in the area, and the cost of stamp duty and fees. More than a third of second time buyers would choose to extend their existing properties instead. Almost a quarter want to move to change the area in which they live, and 15% would relocate to be closer to work or family and friends.
Our view
There will always be times when people cannot afford mortgages. Like all other property cycles, the current slowdown will stay until prices earnings catch up with property prices.