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More ‘Second Steppers’ seek help from parents

However, the latest research indicates that one of the main challenges is a shortfall or lack of a deposit, with over half (52%) of all those questioned agreeing that not having enough saved to cover the deposit is preventing them from taking the second step on the property ladder.

The majority of second steppers will be hoping to use savings (61%) or equity in their current property (67%) to fund the move to their second property.
However, one in six (16%) are also considering going back to their family to ask for financial support. The research revealed that two fifths (44%) of first-time buyers received help from someone for the deposit on their first property. With almost 90% of first-time buyers asking for support in Scotland and a significant eight out of ten of first-time buyers in London asking for financial help.

The average loan size first-time buyers received from family or friends the first time around reached almost £13,000 and many are looking for a similar amount again to help them move up the ladder (£12,746).

The additional capital needed by second steppers to trade up currently stands at an average of £41,000; an almost 200% (194%) increase on the £14,000 that was required 10 years ago.

Two-thirds of current first-time buyers are currently living in flats (43%) or terraced houses (25%); with an average value of a flat at £148,502.

Meanwhile, over half hope their next move will be to a three-bedroom house. The average price for a semi-detached house currently stands at £189,312.
This means that those looking to make this move face a 27% premium just to trade up, before adding on the cost of moving or the fact that there may be an equity shortfall in their current property. Since 2001, the average cost associated with moving home for someone who already owns a home rose by 69% (£3632) from £5290 in 2001 to £8922 in 2011.

In percentage terms, second steppers in the south east face the biggest premium to trade up at 52%, and will need almost £85,000 to trade up from the typical first property to their second home. Londoners will need to find £97,916 to fund the same gap, although the premium across the capital is only 27%. Second Steppers in Wales need the lowest deposit with the cost of trading up at just over £6000.

Stephen Noakes, Mortgage Director, Lloyds TSB said: "We already know that second steppers face a number of tough challenges, and in many ways have been the hardest hit by the subdued housing market, so it is unsurprising that they are struggling to fund the gap needed to trade up to their preferred second home.

"Parents have long been helping to fund their children’s first home, but many are now having to provide further support as they move up the ladder. This indicates that these customers still need attention and support. To achieve a sustainable housing market we need to see movement throughout the market. If second steppers get stuck on the first rung, movement at the bottom half of the ladder comes to a standstill."

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