Tuesday, October 30, 2012
The number of towns and cities across England and Wales that
have seen a decline in sales of typical second stepper properties
have risen to their highest level since 2009, according to new
research by Lloyds TSB In the first seven months of 2012, 374 (or
65%) out of the 577 towns and cities across England and Wales
covered in the survey recorded an annual fall in sales of second
stepper homes. This is the highest total for three years and is a
rise of 2.2% compared with the same period in 2011 (366).
Regionally, Greater London (79%) has the highest proportion of
areas that recorded a fall in second stepper sales, followed by the
north of England (73%) and the North West (70%).
Towns in southern England see the biggest fall in 'second
Nine of the 10 areas that recorded the biggest falls in second
stepper sales in 2012 are in the south of England. Torpoint in
Cornwall recorded the biggest fall (-51.7%), followed by Kings
Langley (-51.6%) and Chertsey (-51.2%). Outside southern England,
Cottingham in Yorkshire recorded the biggest decrease (-46.4%).
In contrast, Ashington in Northumberland recorded the biggest
rise in second stepper home sales (85.7%), followed by March in
Cambridgeshire and Bude in Cornwall (both 60%).
Fall in second stepper sales driven by decline in housing
A Lloyds TSB study found that, on average, first-time buyers
plan to stay in their first property for four years, which means
that many second steppers in 2012 would have bought at close to the
peak of the market.
In general, areas that have seen the largest decline in second
stepper sales have also seen the biggest falls in first-time buyer
house prices since 2008. The price of a typical first-time buyer
home has fallen by an average of 16% (£33,238) over the past four
years in the 10 towns and cities that experienced the largest falls
in second stepper home sales in 2012. This is double the 8%
(£7,338) fall in the 10 areas with the highest growth in second
The decline in first-time buyer house prices over the past four
years has resulted in a significant drop in the level of equity
available for those looking to move.
...and the premium associated with making the second step.
In the 10 locations that experienced the largest falls in second
stepper home sales in 2012, the house price premium associated with
trading up from a typical first-time buyer home to a second stepper
property has risen by 41% (£37,568) over the past four years from
£91,502 in 2008 to £129,070 in 2012.
In contrast, the cost of trading up in the 10 areas that saw the
biggest increase in second stepper property sales has fallen by
nearly a fifth (19% or -£19,191) since 2008.
Suren Thiru, housing economist at Lloyds TSB,
"With many second steppers struggling to fill the financial void
left by the erosion of their equity position amid lower house
prices and the sizable cost of trading up, it is unsurprising that
sales of typical second stepper homes have declined significantly
over the past year. The current difficulties facing second steppers
remain one of the key challenges in today's property market, which
needs to be addressed to avoid the traditional property ladder
turning into something of a slippery slope."