Second Stepper home sales fall in two-thirds of towns
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 stepper’ sales
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%).
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%).
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 stepper sales.
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.
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 buyer4 home to a second stepper property1 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, said: “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.”