Does the govt need to do more to help homeowners climb the ladder?

Does the govt need to do more to help homeowners climb the ladder?

For a number of years now, the major focus in the British property market has been centred around finding ways to get first-time buyers onto the ladder and into the realms of home ownership. 

Whether it was the New Buy or Help To Buy scheme, loans and tax breaks have been implemented for some time across the nation that are intended to help young people struggling to buy their own home to get a mortgage for the first time.

But should the government actually be doing more to help people who have already bought a home, people who want to move up the property ladder and buy again? Many who have already done so can find it difficult to afford a second home, and a new study has shown just how deep this problem runs. 

Comparison site MoneySuperMarket found that savings are the main reason that owners cite for struggling to move up the ladder, as it reported that some 34 per cent of all people who have bought in the past believe it will be difficult to climb the property ladder.

The research discovered that as many as 26 per cent of people believe it will be difficult to move, while another nine per cent said they think it will be very difficult to buy a new home. The average amount that they believe they will need to be able to save before they can obtain a new mortgage is £10,549.

One of the bigger problems is that many older people are struggling to climb the ladder as well, the report showed, with the volume of those aged between 35 and 54 years who would find it tough to upscale their current property sitting at 41 per cent, compared to just 28 per cent of 18 to 34 year olds. 

"There was a time when those in the 35 to 54 age group would have been looking to downsize, but now this is the age group where people are starting a family in some cases or still housing grown up children who are struggling to find their own way," said Kevin Mountford, head of banking at MoneySuperMarket.

"Although they might have the earning potential to make that next step there is the constraint of mortgage term that comes with their age. Lenders will tend to fix the term of repayment to retirement age, so for those movers aged over 34 the repayments on increased value mortgages will be much higher as they’re paying it back over a shorter time," he continued. 

Quite how the government would be able to help people who already own a home move up the ladder is unclear. However, what has emerged is that something needs to be done in this area. When someone climbs the property ladder, it frees up traditional first-time buyer homes, which creates a much more fluid market, helping to get more people into home ownership.