The Barclays Property Insights data showed that recent first-time buyers were already factoring in the potential cost of moving, with 41% saying they would try to keep the value of their next purchase close to their current home to reduce upfront costs.
However, Barclays said this could be a challenge as the average house price for homemovers was 59.9% higher than for first-time buyers, and this gap widened by 1.2% annually in June. Some second-steppers plan to rely on additional support for their next purchase, with 22% saying they would need help from their family.
The prospect of moving also varies by location, with 37% of Londoners saying this would be too costly, compared to 21% of people in Wales. People also seemed unwilling to move too far for their next move, with 65% saying they would not relocate more than 10 miles away.
Second-time buyers turn to larger mortgages
Barclays’ data showed that the average purchase price for homemovers rose 1% year-on-year in June, but the average deposit value fell by 24.8%. The bank said this indicated people were relying on larger mortgages to bridge the borrowing gap, with the share of homemovers borrowers at more than 75% loan to value (LTV) rising from 18.2% to 22.1%.
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Lee Chiswell, head of mortgages at Barclays, said: “The cost of moving up the ladder is forcing many second-steppers to evaluate how far their deposit can stretch, whether they need additional support from family, and what they need from their mortgage.”
Julien Lafargue, chief market strategist at Barclays Private Bank and Wealth Management, said: “Affordability has been gradually improving as pay growth outpaces house prices and rates come down from their peak, but the outlook from here is unusually uncertain. The Bank of England is holding at 3.75% with a divided committee, and the next move looks finely balanced.
“This, alongside elevated policy uncertainty, is forcing homebuyers to proceed with caution. That said, demand that has paused is waiting rather than gone, and once the rate and policy picture clears, the market appears to have a solid base to build from.”
