Climbing the property ladder: second steppers are in great shape to upsize to bigger homes, says new report

Many first-time buyers in London who were trapped in negative equity by the recession can now afford to trade up, thanks to an improvement in the economy, according to a new report by Lloyds Bank.
Many of London’s first-time home owners are no longer trapped in negative equity, according to a new report released by Lloyds Bank.
First-time owners in the capital who are looking to trade up - commonly referred to as second steppers - are in their strongest position for five years, according to the report, with rising property values and an increase in first-time buyers making it easier to sell up and move on.

The price of a typical London starter home is 51 per cent higher than in 2009, meaning that second steppers who bought while prices were still falling could now be sitting on a profit of £190,000. However, it’s not necessarily good news for all concerned, as the report reveals that in London, first-time sellers need to find an extra £330,230 if they are looking to make the next typical jump of upsizing to a detached, family-friendly home.


“Over the past few years second steppers have faced some tough challenges and many have been stuck in their first homes. We are now finally seeing a much-needed boost to this vital part of the housing market, enabling more second steppers to make the next move on the housing ladder,” says Andy Hulme, Lloyds Bank mortgages director.

Finding the deposit is still one of the biggest barriers to upsizing, according to 45 per cent of second steppers surveyed. A similar number are concerned about their eligibility for mortgage approval. But despite this, a third are keen to make the move now to take advantage of London’s buoyant property market.

“While challenges remain as second steppers try to bridge the gap to the next rung on the ladder, a steady rise in property values this year should further ease the constraint on many - and this will have a positive knock-on effect for the whole of the housing market,” says Hulme.

Movement on the capital’s housing ladder comes to a standstill when would-be second steppers remain living in the starter homes that first-timers need to buy to keep the market moving.

Despite rising house prices, last year saw the highest number of first-time buyers in seven years. Even those who bought for the first time as recently as 12 months ago have seen the amount of equity in their homes rise by up to £77,000, due to an increase in the prices paid for starter homes.

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