It is not just first-time buyers relying on the ‘Bank of Mum and Dad’ for help, but home owners trying to take their second step on the housing ladder, according to a new report.
Nearly one in five (17%) of homeowners trying to take their second step on the housing ladder are considering turning to their friends or family to help fund the move, asking for more than £22,000.
The research by Lloyds Bank revealed that people living in their first home still have to find an extra £125,694 to plug the gap between the sale price of their current property and the cost of the house they would ideally move to. This gap falls to £17,370 if it is a semi-detached home.
While almost three in four (71%) intend to raise the deposit required for their next property purchase from equity in their current home, over half (57%) will raid their savings and some 14% said they were considering returning to family members to help them out – typically asking for £22,480. This is up from £21,080 in 2014 and £21,273 in 2013.
The research, which interviewed 505 second steppers, revealed that almost half (48%) had also required help with the deposit on their first property, while half (50%) felt that they wouldn’t be able to make the next move on the property ladder without financial assistance.
Of those considering asking for financial support, four in 10 (43%) admit that parents have had to make sacrifices to help them get on and move up the ladder. One in five (20%) also said that they will now have children later in life due to the challenges of moving up the housing ladder into a family home.
Andrew Mason, Lloyds Bank mortgages director, said: “Parental support has been playing an important role in helping young people get on the property ladder for decades but this is being stretched further, with many Second Steppers continuing to be reliant on the Bank of Mum and Dad to help them make the next move.”
