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The struggles of a second stepper

Wednesday 19 July 2017

A new report from Lloyds Bank shows that almost one in three second steppers need financial support from family and friends to move up the property ladder.

Despite improved conditions for homeowners ready to take their second step on the property ladder, the research suggests that the bank of mum and dad is stumping up additional financial support to help loved ones make the jump from their first home.

It found that almost a third of existing owners think they will still need to rely on financial support from family and friends, and over a third admitted that without financial help, they wouldn’t be able to make their next move.

The research revealed that 50 per cent of those surveyed also required help with the deposit on their first property.

The average loan first time buyers received from family and friends the first time around reached £21,512, only slightly more than they hoped to borrow again (£21,231) from parents or grandparents to take the next step on the housing ladder.

With one in four second steppers thinking it is now harder to move up the property ladder than to get on it in the first place, 41 per cent have been overpaying their mortgage to increase their equity and a third (34 per cent) have increased the amount that they save every month. The research also revealed that 65 per cent have either continued to save or started to save since they moved into their first property.

Almost a quarter of first time sellers admitted to putting off having children until they have sold their first home, (23 per cent) or have fewer children than originally planned (12 per cent) due to challenges faced with being a first time seller.

Andy Mason, mortgage director at Lloyds Bank, said:

"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."

Lack of affordable property, the cost of stamp duty tax and potential changes to interest rates are all notable issues raised within the report as being on second steppers minds as they plan their next move.