Second steppers are increasingly relying on a financial boost from family and friends in order to make their next home purchase, a survey has revealed.
Whilst it has become accepted many first-time buyers are getting help from the Bank of Mum and Dad to secure a mortgage, it would now seem parental support is becoming essential further up the ladder too.
Indeed, Lloyds Bank’s research discovered a third of second steppers, those who are moving from the first home they bought to the next, require an average of £25,450 in financial support from friends and family.
As many as 58% said they wouldn’t be able to take their next step on the property ladder without family and friends.
Sacrifices
However, in their bid to provide their children with a property ladder boost, parents are making significant sacrifices, the report from Lloyds revealed.
More than half have raided their own savings to help their sons or daughters and nearly as many said they planned to downsize in a bid to release the cash required. Two fifths also admitted they would remortgage to raise the money.
Andrew Mason, mortgage products director at Lloyds Bank, said: “Support from generous family and friends remains vital in helping Second Steppers in taking the next steps on the property ladder, despite more Second Steppers now feeling optimistic about the housing market.
“We continue to see parents make big sacrifices as their children return for help with housing for a second time. However, to ease the burden on parents, we are seeing more Second Steppers plan ahead for their next big move by saving and paying more to their mortgage.”
Lloyds discovered the average amount second steppers need to borrow to make their next move has increased in the last year by more than £4,000. Now they need an average of £25,450.
And this is despite more than half of them having already received financial support of an average of nearly £20,000 for their first property.
The report found 62% used equity from their current property to fund their second step on the housing ladder and 39% used personal savings.
But 22% would mainly borrow from the Bank of Mum and Dad to raise the money to fund their next move, 13% would as grandparents for support and 6% would look to friends for the loan.
