Second steppers struggle

GoldenShadow

Re FTBs being better off, just be grateful you have a property and live/work in an area where property is more affordable.

Our first house was 210K. There are two of us. If we were single, neither of us could have bought this house based on income multiples, we would have needed almost 100K deposit to have bought without the other one.

I don't see how you've been forgotten about. Not every FTB thinks the government H2B are much cop and therefore wants to use them, and people like me bought just before the ISAs came out so also didn't get that benefit. Like someone else said, why do you need a bigger house? Why can't you just stay where you are.

Ithaca

Where I live "second steppers" are one of the reasons FTBs are struggling to find property.

We bought our first house in 2007 - a small two-bed terrace - and had expected to move within 4-5 years. In the end we were there over 9 years, and a good number of our friends were in the same position. Often 2-3 kids squeezed into a two bed house but under 7s so room-sharing and a cot in the main bedroom meant we managed.

It took 8-10 years for our salaries and savings to rise far enough to allow us to bridge the gap between a starter home and the next stage up. In the end an increasing number of us have jumped the usual next house (i.e. 3-bed semi) and have pushed budgets to move to the 4-bed "forever" homes just so we don't have to go through the pain again, often probate sales of homes that need massive updating / renovation.

For our circle of friends it's usually taken us until mid- to late-30s to reach a career level which allowed the move... that's about the age people become hospital consultants, or partners in a law firm, or a reasonably senior manager, so it usually comes with a salary bump and coincides with the youngest child starting school (so getting rid of £1000/month nursery costs which can then be used on the mortgage).

But it's certainly kept the FTB market tight in our town over the last decade as the homes just weren't coming onto the market in enough numbers because second-steppers were stuck until we could afford to move up.

Loanranger

You need to increase your income. This is usually done by increasing your qualifications. Or taking a second or third job. The government, that is me and the rest of the taxpayers, are not going to pay for your list of wants.
You come over as someone with a large 'want' list but a neglible 'to do' list.
Stop dreaming and get doing!

Prothet_of_Doom

I've owned 3 houses. Each time we moved due to work and each time we ended up in a house that was smaller.

When we last considered moving UP to a larger house the kids were 8 and 11 (and are now 19 and 22), and the difference between a small 3 bed semi and a large 4 bed detached was £100K. (£160K vs £260K)

Now the difference is £150K (£180K vs £330K)

at the peak in 2007/2008 the difference was £200K (£200K vs £400K)

Instead we had a loft conversion for £15K

Red-Squirrel_2

I've just done the 'second step' that you're looking to do, I'm also single and doing it by myself.

Yes, an increase in value in my flat was a huge help, but I had also increased my salary, and I also understood that moving to a bigger nicer place meant increasing my mortgage, in fact I've more than doubled my borrowing!

Your options seem to be:

• Accept that you aren't ready to move to the bigger house with garden yet, and look at ways of increasing your income over the next few years. After all, its not even 5 years since you bought your first place.
• Lower your expectations, look for somewhere that meets some of your wishes but not all, compromise on size or location or garage, and move in smaller steps.

You have a secure home, a roof over your head that you can afford. I'm no fan of the Tories, but why would any government want to support or subsidise you to have a nicer house and a bigger asset? What's the public interest there?

Kynthia

I think your expectations are too high. You want to move up to a much more expensive property, a forever home even, after only 5 years, on a single income, at a low LTV ratio, without increasing your monthly repayments. Do you really think this is what most people do?

People I know tend to move to a bigger property after nearer 10 years in their first. That's when their salaries have increased or met someone and used two incomes, when they've paid off lots of their mortgage and saved or been given some money by relatives. Rising house prices might give someone a deposit for the next property but that alone isn't what helps them upgrade as the next property will have gone up in value too, so they need to be earning more than they were before to qualify for the higher borrowing.

We hear on this site many people who have had children and are desperate to move to a bigger place but can't. They are earning less than when they first bought (mum has gone part time) and have more outgoings (childcare) so don't qualify for more borrowing, and they haven't saved anything towards the increased deposit or overpaid mortgage so don't have the required deposit on a more expensive property. People seem to thing moving up the ladder is automatic but it isn't.

sKiTz-0

Just to clarify for everybody, I'm not saying I want help from the government. My point was that now first time buyers get all this help, making the second step is actually harder than getting on the ladder in the first place.

Also, I'm not looking for a 'bigger' place as such. I'm looking to cut down my travel time and costs by moving closer to where I work, and also live somewhere I am not constantly disturbed and kept awake by the neighbours. Trouble is, the closer I get to work, the more the prices rise. A property similar to mine in the area I work would cost around £20k-£30k more than it does around here.

The general consensus seems to be either meet somebody to buy with, move in smaller steps or increase income.

Meeting somebody is out of the question, I'm not interested in any of that. Moving in smaller steps could be an idea. I don't know how I could go much smaller than my little 2 up 2 down terrace, so I can't really downsize. I would compromise on the garage/garden aspect though. My main priority is decreasing the amount of neighbours I am attached to, ideally to 0. That is what I am focused on.

Increasing income is easily said, but much harder to do. It's not like I can just choose a nice £50k a year job to walk in to as easy as that. I'm not afraid of hard work to get where I want, a few of you seem to have got the impression that I want everything gifted to me on a plate. I did mention earlier in the thread that I worked 3 jobs for years to save for my deposit. I would literally be working 7 days a week on 3-4 hours sleep a night, working for 17-18 hours for 6 of those 7 days. This allowed me a sizeable deposit of £26k to put down on this house without any help from the bank of mum and dad- this was at a time when large deposits were required for mortgages, and also I had to get the monthly payments down to an affordable level for a single income. Now, whilst this was a good move at the time, and I would do it again if I had my time over, I am 8 years older than when I did that and would quickly get burnt out if I tried to work that much again on so little sleep.

I suppose my main points are that the second step is harder than the first, and also that house prices are ridiculous in general.

savingfortomorrow

could you rent out the spare room to a lodger or air b n b for short intervals

Pixie5740

What help, other than the HTB ISA, do FTB get that isn't also available to other buyers? It's also become more difficult to get a mortgage (for good reason) since the introduction of MMR in April 2014.

sKiTz-0

savingfortomorrow wrote: »

could you rent out the spare room to a lodger or air b n b for short intervals

I have done that in the past and had a lodger for the first 2 years I lived here. The extra money really did help, I must say.

Pixie5740 wrote: »

What help, other than the HTB ISA, do FTB get that isn't also available to other buyers? It's also become more difficult to get a mortgage (for good reason) since the introduction of MMR in April 2014.

To be honest I'm not really sure. Maybe I am seeing something that isn't really there. You do make a good point about mortgages too, I have heard that they scrutinise finances much more recently.

I've just been having another look round on rightmove and expanding my search area. I think the big compromise here is going to be location looking at it. For the kind of place I would ideally like to live - a 1/2 bed detached bungalow, if I live just as far away from work as I do now, but the other direction, those types of properties are going for ~£130k. That would bring the next step down to an affordable level. The trade off being that I wouldn't save any time or money in commuting to work, and would be far away from friends and family who live in this area. But I suppose there always has to be a compromise somewhere, however large or small.

I think the biggest concern for me then would be the lack of local knowledge as I don't know the area at all.