When it comes to the property market, second-steppers have a key role to play. Second-steppers are people who move from their first home – often a smaller starter one – to a bigger one. In other words, they are moving up the property ladder, freeing up the home they live in for first-time buyers or other buyers to purchase.
It’s kind of like the property circle of life, if we can use a questionable Disney-based analogy!
In many cases, second steppers might be starting a family or adding to the children they already have. Therefore they need more space and a larger abode. It might also be young professionals moving from a flat to a house thanks to higher levels of disposable income.
Whatever the reason for it, second-steppers make up a big chunk of those looking to buy homes. And recent research carried out by Clydesdale and Yorkshire Banks has revealed that confidence among the country's second-steppers is on the rise.
Nearly 40% of the UK’s first-time homeowners surveyed by the banks have plans and ambitions to take their second step on the property ladder, the findings showed. The number of first-time homeowners planning to put up a “For Sale” sign and take their next step upwards has leapt by 14% compared to the same period last year.
There are a number of reasons for second-steppers upping sticks, with a third planning a move out of necessity (because they have outgrown their current property), while 24% just want to move further up the property ladder.
Aspirations of second steppers vary across the country, the research also found. For example, those in the North East and North West are the most determined when it comes to moving on, with 48% planning to purchase a new home. By contrast, just 29% of those in the South West are ready to climb the ladder.
As you would expect, affordability is the main drawback for those reluctant or unsure about moving, with 30% citing this as their main worry. A further 29% were concerned about the pressure of finding their dream home – and the hassle involved in this – while 18% were hesitant about taking on a larger mortgage.
So, even though confidence among second-steppers is on the up, there are still a number of potential barriers preventing them from acting decisively. In many ways, second-steppers actually have more to take into consideration than first-time buyers. Second-steppers may be looking for a home large enough to house a growing family or one near a specific, highly recommended school. They may also be moving for work reasons – a promotion, a new job or a new career path – and could be trying to find a home in an unfamiliar area.
However, while there are concerns, the above research clearly shows that it's not putting many second-steppers off. Despite the current political and economic issues, the property market is remaining as steadfast as always.
Also, while affordability is clearly a key factor for second-steppers, the current situation with interest rates – at their lowest ever levels of 0.25% - means it’s a great time to borrow and secure favourable deals, particularly fixed-rate ones.
For a properly functioning property market, confidence among second-steppers needs to be strong. So the above research is certainly something to be positive about.