The latest data to come from uSwitch has found that British homeowners have been lulled into a false sense of security by rising house prices, with many of them facing a significant shortfall in funds when they move.
According to the report , 44% of would-be movers don’t plan to save at all when buying a bigger home.
However, over the past decade, British house prices (terraced, detached and semi-detached properties) have shot up by 21% while flats have only increased by 15% over the same time period.
With 62% of second-time buyers looking to trade up from a flat to a house and almost half not planning on saving, second steppers could face a significant deposit deficit.
The gap between the flat and house price growth rates is widest in Preston where it has grown to 16.5% over the last decade, followed by Colchester (10%) and York (9%).
At the other end of the spectrum, flat owners in Aberdeen, Wolverhampton and Milton Keynes have seen their property prices increase more than local houses – 10%, 3.5% and 1.7% respectively.
uSwitch.com research also showed more than six in ten (61%) second time buyers haven’t saved anything towards upfront costs such as stamp duty, surveying costs or removal costs which can amount to almost £12,000.
Tashema Jackson, money expert at uSwitch.com, said: “Second steppers have been lulled into a false sense of security by rising house prices. In some parts of the country houses have far outstripped flats and so if you are looking to move up the property ladder you need to carefully plot your next steps."
