Getting on the ladder is hard, but the next rung can be as steep
Sunday 14 May 2006
Not all first-timers are buyers.
For those already on the ladder and looking to trade up, life can be just as tough as a first- time seller, according to new research from mortgage provider First Active .
Among people in this category, more than four in five suffer soaring mortgage repayments when they reach the next rung - with a third having to spend an additional £200 each month.
And that's before fees and higher taxes, warns Melanie Bien of broker Savills Private Finance. "Trading up for the first time can be an expensive business."
As most will move to a bigger property, they may also be jumping up a price band and over a stamp-duty threshold. If you buy a home costing more than £250,000, you will have to pay 3 per cent of the purchase price (at least £7,500) in duty- instead of the 1 per cent many pay for their first home (a minimum of £1,250).
The mortgage valuation fee charged as part of a home move is also calculated according to the price of the property, so this is likely to be higher - as are solicitors' fees.
Some 15 per cent of the people surveyed by First Active also report that the transition to dealing with buyers as well as vendors is the most stressful aspect of being a first-time seller.
"Your main bargaining point - that you were chain-free - no longer applies," adds Ms Bien.
And you now have the added stress of trying to time the sale of your existing property with the purchase of a new one.
"You can try to synchronise completing on both at the same time, but only a few lucky people manage this," says Nick Gardner of broker Chase de Vere Mortgage Management.
"Many end up staying with friends or family - or even renting for a short period until the owners of the property they are buying are ready to move."
It often makes more sense, he adds, to find a buyer for your property before searching for a new home. "This puts you in a stronger bargaining position as a house-hunter, because most vendors won't take you seriously if you are selling but have not yet received an offer."
The National Association of Estate Agents (NAEA) warns that struggling first-time sellers will also be the ones who suffer most from the introduction next June of Home Information Packs (HIP), under which vendors pay for all the survey information.
In an NAEA survey, three- quarters of first-time sellers reported that the estimated costs of compiling HIPs - between £600 and £1,000 - would discourage them from putting their homes on the market. This is because the HIP fee will have to be paid whether the property is sold or not.
"Costs like these mean many may find the next step up the ladder too much of a stretch," says NAEA's chief executive, Peter Bolton King. "This will affect the rest of the housing market, slowing it right down and causing frustration for first- time buyers and those further up the ladder alike."
Hazel and David Lambert bought their first home in Basildon, Essex, just over a year ago. At the time, they had just had a baby and were looking to trade up to a family house within 12 months. "We plan to have more children and want to move into a bigger place - with four bedrooms and lots of space," says Hazel.
For work reasons, they hope to relocate to Reading - "We know property is expensive and will mean a jump in our monthly repayments - and we are worried about being part of a chain."You always hear about people being gazumped - it sounds problematic," adds Hazel. "We'll think very carefully about the timing."
Independent Partners: Get fee-free expert mortgage advice and find the right mortgage deal for you.
- 1 Disney heiress Abigail disowns her share of family profits in West Bank company
- 2 The secret report that helps Israel hide facts
- 3 'Women should not laugh in public,' says Turkey's Deputy Prime Minister in morality speech
- 4 Israel's propaganda machine is finally starting to misfire
- 5 HSBC closes bank accounts belonging to Muslim clients in the UK
The secret report that helps Israel hide facts
Woman and two children killed by mob in riots over 'blasphemous' Facebook post in Pakistan
A day in the life of Vladimir Putin: The dictator in his labyrinth
Putin is 'thuggish, dishonest and reckless', says British ambassador to US
Richard Dawkins tweets: 'Date rape is bad, stranger rape is worse'
Boozy, ignorant, intolerant, but very polite – Britain as others see us
- < Previous
- Next >
iJobs Money & Business
£600 - £700 per day + competitive: Orgtel: Senior Investment Accounting Change...
£450 - £650 per day + competitive: Orgtel: My client, a leading bank, is curre...
£350 - £400 per day + competitive: Orgtel: Senior Analyst, ALM Data, Halifax, ...
£500 - £600 per day: Orgtel: Java developer - Banking - London - Up to £600/d...
Day In a Page
A two-bedroom flat with boutique hotel-style interiors, close to the foodie haunt of West End Lane
A two-bedroom flat in a beautiful old vicarage, with many original features, close to the city centre
A three-bedroom 16th-century home with an aga kitchen, private gardens and heated outdoor pool, in Hadleigh
A three-bedrom home in sought-after Queen's Gate Mews, with Italian marble-finished bathrooms
Surrounded by glorious countryside in the village of Udimore, sits this impressive four-kiln oast and barn conversion
A five-bedroom house in the picturesque village of Kettlewell, north Yorkshire
An 18th-century former coaching inn with original staircase, open fireplaces and beams throughout
A Grade II-listed Georgian town house with three bedrooms and a south-facing courtyard, near Arundel Castle
Feel on top of the world at this über chic penthouse on the 37th floor of one of Europe’s tallest blocks.
A Grade II-listed Victorian villa with six bedrooms and two further cottages, all with spectacular sea views
A grade II-listed, Georgian cottage with mature 50ft garden, perfect for summer entertaining
A magnificent Georgian pile with turrets, seven bedrooms, a heated pool and four acres of gardens
Fairoak Farm has five bedroom suites, gym, outdoor swimming pool and golf course
Chic two-bedroom river-fronted flat with a private lift that delivers you directly to your home
A spectacular seven-bedroom Tudor pile, once owned by Henry VIII, with 18 acres of land
A seven-bedroom Georgian property previously used as a picturesque wedding venue
A split-level flat in a church conversion with two en suite bedrooms and 1,200sq ft of living space
A three-bedroom bungalow situated behind an impressive stone wall, £645,000
Windsor Castle overlooks this three-bedroom Victorian cottage located on one of Windsor's smartest roads
Chapel House is a former vicarage with nine bedrooms in the beautiful Upper Wye Valley
A five-bedroom B&B and separate owner's accomodation with potential for conversion
Enjoy summer by the Thames in this two double-bedroom converted warehouse in Rotherhithe village
A one-bedroom, luxury apartment with private gym and concierge service in Moorgate
A four-bedroom house in Hermitage Gardens with three reception rooms and landscaped gardens
A seven-bedroom Grade II-listed property with a separate self-contained apartment
A five-bedroom Victorian house with three reception rooms and galleried landing, £695,000
A six-bedroom farmhouse with five acres of land in a former cloth-making village
A secluded seven-bedroom detached house with large private garden, £490,000
A three-bedroom cottage overlooking Sarratt village green with open fires and solid oak floors
A three-bedroom maisonette flat in a Grade I-listed, Georgian townhouse in a sought-after location
A one-bedroom apartment located within a private gated development, north of Turnham Green
Look forward to a brighter future at two-bedroom Sunny Cottages, ideal for Londoners looking to downsize
A three-bedroom red-brick cottage with outbuildings and pretty gardens, £200,000
This three-bedroom flat within a former textile factory spans the corner of the fourth floor and has a balcony
A charming four-bedroom Oxfordshire cottage with oak floors and chunky-beamed ceilings, £465,000
A beautiful one-bed flat in a sought-after portered block, with access to Norland Square communal gardens
A one-bedroom flat within a Sixties school conversion with high-spec design and open-plan kitchen, close to Lambeth North Tube, £435,000