A third of homeowners find moving up the property ladder harder than buying their first home, according to new research from Lloyds Bank.
So-called second-steppers – those who have bought their first home and now want to upgrade – cited the difficulty of selling their current homes and finding suitable new properties as the most common challenges.
Here, we take a look at how to make a successful property sale and use equity to buy a new home.
- For guidance on arranging a mortgage for your new home, call Which? Mortgage Advisers on 0800 197 8461. Alternatively, fill in the form at the bottom of the article and a member of the team will call you back.
Why it is hard to move home?
In today’s market, most homeowners anticipate that they will have to wait 18 months before being able to sell their home.
Currently, more than a third (35%) of home movers feel that it’s harder to sell their property now compared with 12 months ago, and a further 29% think it will be more difficult to sell in a year’s time, Lloyds Bank found.
The overwhelming majority (71%) anticipate that their home will be bought by a first-time buyer if and when it does finally sell.
The average second-stepper is 33 years old, which is down from 35 in the previous year, according to Lloyds Bank.
On average, second-steppers earn an annual of £57,291, up slightly from £57,137 last year. The vast majority (82%) are also married, which is up from 78% in the previous year.
- Find out more: home movers – everything you need to know
Selling your house in today’s market
If you’re in the process of selling a house, the following tips could increase your chances of making a successful sale.
1) Get your finances in order
Before making the decision to sell, you’ll need to work out whether you can afford to move.
If you’re planning to purchase a more expensive property, then you should find out how much you can borrow and which lender will offer you a better deal.
You might be able to port your mortgage if you’re still within the terms of your existing fixed-term deal, but be sure to check whether you’ll need to pay early repayment charges.
Keep in mind that you’ll need to pay stamp duty on your new home, and that bill will be due 30 days from when the sale completes.
2) Keep your home in shape
It’s important that you give the best impression of your home to increase the likelihood of someone making an offer.
Make sure your property is clean, tidy and free from clutter to allow prospective buyers to imagine how they’d like to use the space.
The first thing a buyer sees will be the exterior , so be sure to keep your garden tidy, windows clean and repair any broken gates or fences.
If your home is a little run-down, it might be worth considering some home improvements. A fresh coat of paint in a neutral colour can instantly improve your property’s appeal.
3) Get your property valued
Setting the right asking price for your home is vital, but it’s not always easy. A price that’s too high could put people off from making an offer, while one that’s too low could lose you money.
Spend a bit of time researching how much your house is worth based on recent local market activity and invite at least three different estate agents round to value your property.
Make sure you use estate agents with a proven track record of selling properties similar to yours in your area. Our estate agent comparison tool, in partnership with GetAgent, can help you search through and get quotes.
- Find out more: 7 reasons your house isn’t selling
Finding the right home for you
Finding the right place to buy can also present challenges for aspiring home movers.
More than a quarter (26%) of prospective home movers see a lack of suitable properties as the main factor delaying them from moving, Lloyds Bank found. Another quarter worried that the homes they wished to buy would be unaffordable.
Before you embark on the search for a new home, work out where you’d like to live. You can use our area comparison tool to find out more about local authorities, including Ofsted ratings and property prices.
When you go to view a property, keep an eye out for anything that could indicate long-term issues – you can download our house-moving checklist to make sure you don’t miss a thing.
Before you exchange contracts, it’s often worth getting a house survey, especially if the home is older or a fixer-upper. While you’ll need to pay for this yourself, it can highlight any structural damage or potential repairs.
And finally, think about how long the property is likely to suit your family’s needs – including if you have more children, change jobs or retire.
- Find out more: finding the best place to live
Porting your mortgage
Porting your mortgage means you transfer your existing loan from your current property over to your new home.
The majority of mortgages are portable, although it’s worth checking when you make your application.
Keep in mind that lenders will use their current lending criteria to decide whether you can port your mortgage, and this could be different from the criteria used when they originally decided whether or not to give you a loan.
Your circumstances may also have changed in the mean time – if, for example, you’ve left work or had more children – which could influence the lender’s affordability assessment.
Before deciding whether or not to port your mortgage, you should take fees and interest rates into account. A mortgage with a better rate than the one you’re on could end up being more expensive when you factor in exit fees for your current mortgage and arrangement fees for the new one.
Speaking to a mortgage broker can help you find the best option for your financial circumstances.
Our impartial brokers at Which? Mortgage Advisers can help you find the best mortgage lenders and help you make a financial plan to move up the property ladder.
Give them a call on 0800 197 8461 or fill in the form below for a free consultation on the best options to for you.
Your home may be repossessed if you do not keep up repayments on your mortgage.
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