Young adults who make it on to the housing ladder are increasingly getting stuck on the first rung, with over half unable to fund their next deposit.
One in six home owners looking to trade up for the first time may have to ask their family for financial support to make the move.
The price difference between a typical first-time buyer property such as a flat, and a subsequent home such as a semi, is on average £41,000, and in Greater London nearly £98,000.
Over half (52%) of ‘second steppers’ believe they will not be able to afford the deposit for their next property.
The additional capital needed by second steppers to trade up is an almost 200% increase on the £14,000 that was required to plug the gap ten years ago.
Two thirds of current first-time buyers are living in flats (43%) or terrace houses (25%) with an average value of a flat at £148,502. Over half hope their next move will be to a three-bedroom house. The average price for a semi-detached house stands at £189,312.
This means that those looking to make the 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.
Stephen Noakes, mortgage director at Lloyds TSB, which did the research, 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.”
Source EAToday 11 June 2012