"It is clear that despite improved conditions for this part of the housing market, second steppers will still rely on the ‘Bank of Mum and Dad’"
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. The average equity level of £105,068 from the sale of their first home mean second steppers need an extra £21,005.
Those considering turning to family members are typically looking to borrow more than £20,000.
The research revealed that 50% also required help with the deposit on their first property. The average loan size first time buyers received from family and friends the first time around reached £21,512, only slightly more than they are hoping to borrow again (£21,231) from parents or grandparents to take the next step on the housing ladder.
One in four second steppers think it’s now harder to move up the property ladder than to get on it in the first place. As such, 41% have been overpaying their mortgage to increase their equity and a third (34%) have increased the amount that they save every month. The research also revealed that 65% have either continued to save or started to save since they moved into their first property.
Just under a third (32%) of second steppers said that not finding the right property remains the biggest issue that may delay the sale of their current property. Lack of affordable property (26%), the cost of stamp duty tax (24%) and potential changes to interest rates (22%) are other notable issues on second steppers' minds as they plan their next move.
The size of deposit required (29%), tighter lending criteria (28%) and potential interest rate changes (28%) are the key issues first time sellers face. Other challenges also include a low supply of family sized properties on the market (27%), concerns over the economic environment (26%) and the cost of moving (25%).
Andy Mason, mortgage director at Lloyds Bank, commented: “Parental support continues to play a vital role in helping young people to get on the property ladder. However, it is clear that despite improved conditions for this part of the housing market, second steppers will still rely on the ‘Bank of Mum and Dad’, with hard-pressed parents being once again called on for financial help. Without this extra financial support, second steppers believe that they wouldn’t be able to make the next move on the property ladder for some time.
“However, 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.”
