It seems that despite getting onto the first rung of the property ladder and settling down, paying a mortgage for a few years and maybe having a child or two, one in three homeowners need a helping hand from the Bank of Mum & Dad to take the next step.
Research from Lloyds Bank has found that 32% of would-be second-steppers need an average of £21,231 from the Bank of M&D and also ask for help from grandparents and sometimes even friends.
Just over a third (35%) can’t move without this help and many people have to delay starting or adding to a family until they’re in their second property.
A big step-up
The Lloyds study found that the jump between a first-time home and the second step, which is typically detached, is £126,000. Generally, however, the equity level in the first home is just £105,068, which doesn’t quite bridge the gap, sometimes explaining the £21,000 leg-up from the Bank of M&D.
To gather the deposit for the second home, 63% plan to use their existing equity, while 41% said they’d use savings. The people who plan to ask for family help usually ask for £20,000 or so.
A quarter of second-steppers think it’s actually harder to move up than to get onto the property ladder. Around 40% of first-timers overpay their mortgage to increase their equity and 34% have started saving more. Many first-timers are looking to the second step as soon as they move into their starter property and begin their savings campaign there and then.
The other challenges
Another problem that second-steppers face is not finding the right property to aim for. This can delay them putting their first property on the market, or slow down the proceedings once it’s up for sale. Just over a quarter (26%) claim that they can’t find suitable property in their price bracket, while 24% think the Stamp Duty on a larger place will be prohibitive. Thinking further ahead, 22% worry about changes in interest rates.« Back to Latest News