First-time home buyers expect to spend around 14 years in their ‘starter’ home before they can move up the property ladder, a report has found.
People currently living in their first home bought it at the age of 28 typically – but they expect to be aged 42 on average when they buy their next property, the Post Office found.
By contrast, first-time buyers in the late 1960s were aged around 25 when they took their first step on the property ladder and were just three years older, at 28, when they bought their second typically, the report said.
Many aspiring second-time buyers will have bought their first home close to the height of the property boom, meaning that some have been stuck with little or no equity in their home to help them climb the property ladder.
But house prices have been showing signs of being back on an upward march in recent months, with Halifax reporting the fastest annual house price increase in almost three years last Wednesday.
Government schemes such as Funding for Lending have prompted an increase in mortgage availability and lenders to slash their mortgage rates.
Initiatives such as Help to Buy and NewBuy have also helped people with smaller deposits in particular, and lenders have reported a surge in first-time buyers entering the market in recent months, which should also help more first-time sellers.
Two-fifths (41 per cent) of people currently living in their first home told the report that competitive mortgage rates would tempt them into moving, while one quarter (25 per cent) said they would be prompted to move in order to start a family.
A Stamp Out Stamp Duty campaign was launched this week by the TaxPayers’ Alliance, as it was revealed that more than a quarter of home buyers in England and Wales are now paying stamp duty at the higher rates of three per cent or more as house prices rise. Families buying a home costing between £250,000 and £500,000 pay between £7,500 and £15,000.
More than 4,000 people took part in the Post Office research across Britain in May.
Housing Minister Mark Prisk said: “The numbers of first time buyers are at their highest since 2007, but there’s still more to do and I’m determined that if people work hard and want to get on or move up the property ladder, that there is government help available for them to do that.
“That’s why we’ve introduced the Help to Buy: Equity Loan scheme, which offers a valuable alternative to the Bank of Mum and Dad to creditworthy buyers and enables people to buy with a fraction of the deposit they would normally require.
“And it’s why we’re tackling the record deficit we’ve inherited, preventing the need for rapid increases in interest rates and keeping mortgages more accessible.”