FIRSTTimeHomeBuyerTax.net

Young Buyers Trapped in First Homes

Written by Patrice G. Becker    Thursday, 22 December 2011

HUNDREDS of thousands of young people are 'trapped' in homes they bought when property prices peaked four years ago, a report has warned. It will be nearly impossible for them to move from their first home on to the second rung of the property ladder. Since 2007, they have seen the value of their house plummet by an average of ?11,000 - amid fears that prices will continue to fall. The worst-hit victims have been plunged into negative equity, which means their mortgage is bigger than the value of their home. Even those who have avoided this situation will find it difficult to buy a bigger property because of the crippling cost of moving, according to the report by HSBC. Experts fear the housing crisis is forcing the young to delay important milestones, such as getting married and having children. The report found that for 360,000 young people, buying their second home is a 'near impossible' task. In 2007, the year that the credit crunch struck and property prices peaked, a typical first-time buyer bought a home for ?162,423. Today this property is worth only ?151,061, a fall of ?11,362. To buy a home on the 'second' rung of the ladder, perhaps to start a family, a young person would have to spend ?208,675. On top of that, the cost of moving is ?27,410 - more than the average annual salary. This bill includes a 10 per cent deposit, legal and estate agency fees, removals and a survey.

Last Updated ( Thursday, 22 December 2011 )