Millions trapped by property slump

HUNDREDS of thousands of young Scottish homeowners - among millions across the UK - have little hope of climbing the property ladder any time soon, a new report states.

The study reveals 53 per cent of homeowners aged 18-34 would like to buy a new home within the next two years but 44 per cent think it is unrealistic that they will be able to do so because of the low value of their property, the difficulty in finding a mortgage and a lack of suitable properties for sale.

As a result of buying during the property bubble, an estimated two million homeowners across the UK are "trapped" and have no chance of trading up.

One Scottish estate agent yesterday called for more support for so-called "frustrated middle movers".

The survey, by banking group Santander, reveals that just one in five homeowners aged 18-34 expected to live in their first property for more than five years, but a third had already done so, despite wanting to move. Almost three-quarters of homeowners in this age group are still living in the first property they bought.

With the expectation of moving on quickly from their first home during the property boom, 59 per cent of young homeowners made compromises on their first purchase in order to get a foot on the property ladder - and many are now stuck in the "compromise" property.

One in three compromised on the location of their property, 30 per cent compromised on the size, and 18 per cent settled for fewer bedrooms than they would have liked.

A further 18 per cent bought their first property with less outdoor space than they would have liked and 5 per cent said they were forced to compromise on the style of the property.

Of those homeowners aged 18-34 who would like to buy a new home in the next two years, the average time they now think they will realistically have to wait until they can do so is at least two and a half years.

Mark Hordern of the Glasgow Solicitors' Property Centre (GSPC) said the frustration of such middle movers was felt across the whole of the property market.

He said the key to getting the property market moving again lay in mortgage lending.

Mr Hordern added: "It is GSPC's point of view that we should seek to do something for first-time buyers - seek to have some sort of support for first-time buyers that might not apply to other parts of the market. This is something that would have to be done at government level or at the least at banking level."

Mr Hordern said, however, that the GSPC had seen sales during May broadly ahead of where they were this time last year.He said there were also indications that mortgage lending was picking up, with the number of mortgages being approved for purchasing properties having increased.

The survey showed that the main barrier to middle movers taking their next step on the property ladder was the need to save for a bigger deposit, as banks place tighter demands on mortgages, a factor cited by 32 per cent of those surveyed.

A quarter said that they needed the value of their current home to increase before they could consider buying a new one and a similar number said that finding an affordable mortgage for the amount they need to borrow was a struggle.

Other factors preventing people from moving included a lack of suitable properties on the market.

Phil Cliff, Director of Santander Mortgages, said: "There are a lot of 'frustrated middle movers' who made compromises on their first homes and have now been stuck with these for longer than they wanted."