An increasing number of second steppers think it is harder to sell their home, despite improving value in the equity of their property.
According to new research from Lloyds Bank, 39% of second steppers think it will be more difficult to sell their existing property this year compared to 12 months ago, versus just 18% in 2015.
This is despite house price growth boosting the equity of those still living in their first homes to more than £100,000.
Second steppers are mostly couples and young families moving on from their first-time buyer flats to secure more space and a garden.
Many had previously found themselves stuck in their starter home with little or no equity as the economic downturn took hold – but the latest figures show that conditions for this group have improved as they prepare to take their next step on the property ladder.
Today’s typical second steppers bought their first property in 2012, when the average price of a first-time home was £140,004.
Selling their home now for the average first-time buyer house price of £205,723 would provide them with an average equity of £105,068 – quadruple the £23,643 from four years ago.
Other factors have also improved for second steppers, including record low mortgage rates and better home affordability.
The findings show that the gap between the sale price of their current property and the cost of their ideal home – typically a detached property – is £126,000.
However, the average equity level of £105,068 from the sale of their first home can help to reduce this gap by 83%, meaning that second steppers need only add an extra £21,005 to their existing mortgage.
The report reveals that over a quarter (26%) are worried about the uncertain economic climate, deposit size remains a key challenge (29%) and a third (32%) of these new and growing families are struggling to find the right property.
The survey also found that a quarter (26%) of prospective buyers want to move to a recently developed or renovated property, with nearly the same number (34%) seeking a new build.
Andrew Mason, Lloyds Bank mortgage director, said: “Second steppers are yesterday’s first-time buyers and the conditions to help them climb to the next rung on the property ladder are better than they’ve been for over four years. Despite this, many still feel that things are tough out there and that it’s getting more difficult to sell your first home and move up the ladder.
“Second steppers are telling us that finding the right property can be tough, and because of that, they’re delaying their move. However, if too many second steppers hold out for a long time for their ‘dream home’ this could reduce the availability of homes for first-time buyers and slow the market.”
Average regional price gap for second steppers
North East, £110,828
Yorkshire and the Humber, £131,321
North West, £138,348
East Midlands, £108,923
West Midlands, £140,645
East Anglia, £129,952
Wales, £106,980
South West, £151,897
South East, £236,005
London, £317,463
Northern Ireland, £69,053
Scotland, £109,245
