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Cheap mortgage could prevent buyer "bottleneck"

Date: Tue, 23 May 2006

Many second-time property buyers are preventing first-time buyers stepping on to the property ladder because they can't afford to move.

Financial provider Abbey suggests that many homeowners are being priced out of moving house after buying their first property and are therefore creating a "bottleneck" in the housing market.

A total of 49 per cent of second-time buyers are concerned that moving to a larger house would result in significant higher mortgage repayments, whilst seven per cent are worried about covering the other costs associated with moving house such as stamp duty and legal fees.

Paula Ickinger, product executive for mortgages and loans at Abbey, said: "First-time buyers are getting older whilst they are also squeezing in careers and families before turning forty. They may be trying to take bigger steps up the ladder in a shorter period of time, but high house prices are preventing them from doing so."

Ms Ickinger added: "Wage increases have not kept pace and therefore this has had a significant impact on existing homeowners' ability to move up to a bigger property."

However, a cheap mortgage could help some second-time buyers move up the property chain as well as boosting the affordability of first-time buyers.


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