Despite improved conditions for homeowners ready to take their second step on the property ladder, additional financial support is still required to help make the jump from their first home. Almost a third (32%) of ‘Second Steppers’ think they will still have to rely on financial help from family and friends to move up the property ladder, according to the latest Lloyds Bank Second Steppers report.
Second Steppers plan to raise the deposit required for their next move by borrowing money not just from the ‘Bank of Mum and Dad’ (17%), but also grandparents (9%) and friends (6%). Of those who require financial help from their parents, almost half (47%) believe that their parents have had to make sacrifices in order to help them move up the property ladder.
The price difference between a typical first time buyer home and a Second Stepper’s ideal home – typically a detached property – is £126,000. While the average equity level of £105,068 from the sale of their first home can help to reduce this gap by 83%, Second Steppers usually need to add an extra £21,005 to climb up the ladder.
However, for those taking the second step up the property ladder in London, it is very unlikely that they will be viewing detached houses. The most common second step would be to move from a small studio or 1-bed flat to a 2 or 3-bed flat. This relatively small step can often involve having to spend another £200,000 or more depending on the area. Also, if you sold a one-bed flat for £250,000 and bought a two-bed flat in a slightly nicer area of the capital for £500,000 then you would need to stump up another £15,000 in stamp duty fees.