Wednesday, 9 April 2008

Many families plan to step down from the property ladder

According to a recent report many families in the UK are doing the opposite of what many first time buyers have been trying to do for many years – taking a step down from the property ladder. It is thought that those expressing an interest in doing this are hoping to sell their homes before property prices fall too much, and are then planning to rent a home until property prices fall low enough for them to purchase another home at an affordable price.

In a recent survey around 18% of those planning to sell up said that they were thinking about moving into rented accommodation for a while so that they could see what happened with house prices before they purchased again, and hopefully would be able to buy at a much lower price. There have been a number of house price falls over recent months, and a recent report indicated that house price growth had fallen to its lowest level in twelve years.

One of the main reasons for these moves has been the arrival of the worldwide credit crucnh affecting the ability to get a mortgage and the general cutback of loans.

However, industry expert warned that those hoping to sell high and buy low needed to be cautious, stating: 'It's a dangerous game to speculate on the property market with your own home and is not for the faint-hearted. The average property has to fall around 7% in value before you even break even once you take all the costs of selling, moving and then buying again into account. Stamp duty is the biggest cost. For people in more expensive homes, the market has to fall further still - nearer 8%. So you need the market to drop a very long way before this starts to look like an attractive prospect.'

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