‘Second Steppers’ – the link between first time buyers and the rest of the housing ladder – are experiencing increased confidence in the housing market this year, according to the fourth annual Second Steppers Report carried out by Lloyds Bank.
Lloyds define Second Steppers as yesterday’s first time buyers and today’s sellers – living in the homes that the first time buyers need to buy to keep the market moving.
The findings show people living in their first home have to find an average of £58,400 to make the natural next step from their current property to their ideal next home.
However, across the country, the figure varies significantly. In the West Midlands, people will need to find an average of just £21,000 extra to make the step up. At the other end of the scale, people in East Anglia say they would need an average of £80,800 to climb the property ladder.
Lloyds report that market confidence is high in 2014, as just a quarter of Second Steppers see economic uncertainty as a key challenge – a reduction of 10% since last year’s report. Furthermore, the number seeing negative equity as a challenge reduced by 11%to just 14% of Second Stepper respondents.
The success of The Help to Buy Mortgage Guarantee scheme has contributed to Second Steppers being more confident in the level of demand from first time buyers, as just under a third (29%) see a lack of first time buyers as a key challenge, which is a significant reduction on the 2013 figure of 41%.
Over the past year, house prices rises have been well documented, and according to Lloyds’ report, this has benefitted second steppers by giving them more equity in their properties when they come to sell.
Nationally, 43% of respondents said that rising house prices have had a positive impact on their situation and ability to move up the ladder. The average Second Stepper estimates that their current property has increased by 20% in value since they purchased (over an average period of four years).
The number of people concerned about the size of deposit they required to move also fell in the last year, from half (50%) of Second Steppers in 2013, to 37% in 2014. This again suggests that increased levels of equity are allowing people to put more towards their next deposit.
The report also found that the average Second Stepper expects to pay £282,000 for their second property and that 40% of first time sellers believe it will be easier to sell their property than last year, compared to just 12% recorded in 2012.
Marc Page, Mortgages Director at Lloyds Bank, said: “As house prices are rising and barriers to the next step are reducing, confidence about selling the first home and being able to move up is increasing. For most regions of the country this is helping people make that jump across the gap to the next rung on the ladder.”