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Lieke Braadbaart

Online Writer
Published: 27/06/2017
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While there's a lot of attention on the help that first-time buyers get to boost them onto the property ladder, new research from Lloyds Bank has found that 32% of second steppers require more than £20,000 in financial support to help them move further up the ladder.

Easier the second time around?

The first step is the hardest to take, the old saying goes. And yet Lloyds Bank's survey suggests that the second time can be just as much of a struggle, with 32% of second-home buyers requiring an average of £21,231 in financial support, which most often comes from the Bank of Mum and Dad.

So, even though second-timers should have a much better idea of how the house buying process works and added to their wealth through mortgage repayments, still 35% say that they wouldn't be able to move house without financial support. As the typical price difference between a first home and a second stepper's ideal next home – usually a detached property – is £126,000, and the average equity that comes from selling a first home is £105,068, those looking to step up will need to find an extra £21,005 to add to their existing mortgage.

Interestingly, 50% of these would-be second steppers also required help with the deposit on their first property to the tune of £21,512, which is only slightly more than what is needed for the next move. At least for the next step, 63% plan to use the equity from their current property, and 41% will look to plunder their savings.

Still, while less second steppers will depend on financial help, the 26% who are considering turning to family will be looking to borrow more than £20,000! Most will borrow this money from the Bank of Mum and Dad (17%), but grandparents (9%) and friends (6%) are also asked for a loan. Of those who ask their parents, 47% believe their parents have had to make sacrifices to help them move up the ladder.


Those with dreams of moving up the ladder might furthermore be unconsciously pressuring their parents into helping them out, as 23% plan to delay having children until after their first house has sold, and 12% are planning to have less children than originally planned. For a lot of parents, anything that decreases their chances of getting grandbabies may be a powerful motivator. At the same time, 13% have had to or will have to change their career to pursue their property dream.

Luckily, a majority of 56% said the challenges have had no impact on their social or personal circumstances, possibly because many have been preparing for their move for quite some time. Specifically, 65% have continued to save or started saving ever since they first moved into their own home, while 41% have been overpaying their mortgage to increase their equity and 34% have increased the amount they save every month to prepare for the next move.

Andy Mason, mortgage director at Lloyds Bank, commented: "It is encouraging to see many second steppers planning ahead by overpaying their mortgage and making bigger contributions into savings accounts to prepare for when the perfect home becomes available."

Other challenges

If you've managed to amass a decent pot of money, with or without help, and found the perfect mortgage for your needs, all you need is the perfect home, which also might be more of a challenge than many second steppers hope. Indeed, 32% are worried that not finding the right property will delay things, more so than the lack of affordable properties (26%), the cost of stamp duty tax (24%) and potential interest rate changes (22%).

Then, once you've managed to make your way through all that, it's time to start preparing for your third step on the ladder! Or, hopefully, you'll have found the right home in the right place to allow you to feel settled in for some time.


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