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Second steppers struggle

Our consumer journalist Christine Toner looks at how second steppers are feeling about the prospect of moving up the ladder, plus remortgaging rates and the good news for those struggling to save a deposit.

March 14, 2018

second steppers

Record remortgaging

The number of people remortgaging hit a nine year high in January, according to latest figures from industry trade body UK Finance. There were 49,800 new homeowner remortgages completed in the first month of 2018, 19.1 per cent more than in the same month in 2017 and the highest monthly number of remortgages since November 2008.

Jackie Bennett, director of mortgages at UK Finance said: “While an increase in remortgaging is expected in the New Year as people put their household finances in order, this strong growth is above the seasonal fluctuations we tend to see at this time of year.
“There was the usual dip in both first-time buyers and home-movers post the December festive period, but mortgage lending in both segments increased compared to the same period in 2017.”

“However, growth in the buy-to-let market remains subdued, reflecting the ongoing impact of recent tax and regulatory changes.”

The return of the 95% mortgage

For the vast majority of would-be home buyers saving for a deposit is the biggest hurdle to overcome. However, there’s good news for those people struggling to raise enough cash. According to the Moneyfacts UK Mortgage Trends Treasury Report, the number of mortgages at 95% loan-to-value has increased considerably, with 37 new high LTV mortgages coming to market in just one month. Borrowers can now choose from over 300 products for the first time since April 2008.

Charlotte Nelson, finance expert at Moneyfacts, says: “Providers know that many borrowers on their mortgage books, who are coming to the end of their mortgage, may want to take advantage of the low rates on offer elsewhere.” As a result, providers need to stay competitive to keep first-time buyers interested. And first-time buyers can take advantage of this competition, so everybody benefits”.

One in three worry about moving up property ladder

While first time buyers may struggle with raising the deposit for their first home, those already on the property ladder have problems to contend with too. According to Lloyds Bank’s annual Second Stepper report, which tracks the challenges faced by first time sellers, one in three (35%) of these households believe it will be more difficult to sell their home this year, with worries over the economy, the size of the deposit they’ll need and a shortage of family-friendly properties.

Andrew Mason, Lloyds Bank Mortgages Director, said: “Second Steppers are optimistic about the market conditions, which are now better than they’ve been for over five years, and with many building up substantial equity in their homes and more first-time buyers entering the market, their next move may not be far away.”

“However, the interest rate rise we saw late last year marks the first increase first-time sellers have seen since becoming homeowners and even though it was small it has caused some concern.”

Speak to a fee free mortgage adviser today to check the deal you’ve found is best for you. With our mortgage partners at London & Country you can start your search online and speak to them at any point. Find out more.

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