First-time buyers may not believe it but getting a foothold on the property ladder isn't always the most difficult house-hunting manoeuvre: trading up to the next home can prove even more difficult.
According to new research by Lloyds TSB the cost of moving up the next rung leaves one-in-six "second steppers" asking their parents for help. As the cost of moving from a typical London flat to an equally average semi is nearly £100,000, many end up stuck in their starter home.
However, on a limited budget about £350,000 is the norm it is possible to trade up to an extra bedroom or two, with some more living space and a bit of garden, if you explore lesser-known areas, think creatively or can undertake "a project".
Buying a wreck
The first option is to sacrifice comfort and buy a wreck or somewhere you can extend. Jimmy Waight, a senior sales negotiator at Pedder estate agents, is selling a two-bedroom house in Brockley Rise, south London, close to the increasingly fashionable Honor Oak Park (trains to London Bridge take 12 minutes). The property is priced at £319,950 (pedderproperty.com) and Waight believes there is huge expansion potential, with planning consent.
"Next door has extended, so there is a precedent and it would give you much more living space for a big kitchen diner," he says. "The garden is long so you'd not be losing out there."
Long gardens also hold potential for a stand-alone build space-seekers are increasingly looking to their gardens to create offices, studios and playrooms and, depending on the size of your scheme, you may not even need planning consent. Garages have potential to be converted into extra rooms, too.
But Waight believes the most interesting development opportunity is an undeveloped loft. "Bedroom numbers normally dictate the value of a property, and if you can get another bedroom and maybe a bathroom up in the loft it will be well worth it," he says.
Conservation area potential: Deptford
Don't let snobbery spoil your search. The words "conservation area" tend to draw middle-class buyers like a magnet, making house prices rocket. This is why it pays to seek out conservation areas in the making. Lewisham council is in the process of creating a conservation area in Deptford around Creekside and Albury Street (one of the prettiest and most historic streets in southeast London). Housemartins has a three-bedroom, two-bathroom house in Albury Street - in the heart of this cobbled enclave, on the market for £350,000).
Roy Woolford, director of the firm, says Deptford is very much on the up, with a series of major schemes along the banks of the Thames already under way. Grinling Gibbons Primary School and Tidemill Primary School are both rated "outstanding" by Ofsted, and there is a new academy school for older pupils.
"There are more artists living in Deptford than anywhere else in the UK and it is really regenerating the high street," says Woolford. "People perceive it as a place you wouldn't want to go but they really should take a look at it because there is so much development and improvement going on."
Consider a total refurb in Peckham
Jason Morris, manager of JT Clarke in Peckham has a three-storey Victorian house in King's Grove, Peckham. This area is in the throes of some serious regeneration, and 10 minutes by train from London Bridge.
The house is on the market for £375,000 but in this market vendors have to be flexible. And Morris believes spending £40,000 to £50,000 on a refurb could leave the house worth anything between £450,000 and £525,000.
He believes most "rookie" buyers are deterred by a major refurb, cutting competition and making negotiation easier.
Cinderella postcodes: Clapton, E5
Another option is to buy in a "Cinderella postcode somewhere a bit shabby, perhaps, but living next to a desirable location and with potential to blossom.
Clapton doesn't have that musthave ring about it, but it is close to London Fields and Victoria Park, both of which have seen dramatic gentrification — and price rises in the past five years. At the moment it remains affordable for second steppers. Keatons is selling a smart three-bedroom period maisonette in Clapton (12 minutes to Liverpool Street) where the asking price is £360,000.
Debby Blow, a partner at Keatons, sees the area changing rapidly as people priced out of nearby postcodes look north-east, and the tell-tale signs are on show on the high street.
"We are having an influx of coffee shops, toy shops, and bookshops lots of families are moving here for the schools and the council has spent a huge amount on bringing up the area," she says.
Two-up two-downs: Stepney Green
If you don't want to carry out work then you are going to have to make other compromises. The first is space. London is blessed with plenty of two-up two-downs and while in floor space they may not be much bigger than a two-bedroom flat, they do have advantages, such as split-level living and the possibility of a garden.
A prime example is a very cute two double-bedroom cottage just off White Horse Lane, handily located close to Stepney Green Tube. The house is small but beautifully formed with a double-height ceiling, original fireplaces and a spiral staircase. It is on the market for a guide price of £350,000 with Felicity J Lord (fjlord.co.uk).