08 Mar, 2019/ by Homeward Legal /Equity Release
So-called second steppers face a big financial challenge to move up the property ladder.
According to research from online estate agent House Simple, first-time homeowners who are ready to move on to their second property will have to find an extra £75,388 on average for their next purchase.
Big step-up in costs in last 10 years
House Simple analysed Land Registry data to look at the average price of flats and houses (only terraced and semi-detached properties) compared to 10 years ago across 100 UK towns and cities.
In 2008, before the financial crash affected lending, the step-up in price from flat to house was £37,225 on average.
In 2018, says House Simple, that price differential has more than doubled to £75,388.
The analysis for second steppers moving on to a detached home shows they require even deeper pockets: the average price differential is £133,122.
House Simple calculates that if the price differential continues to grow at the same rate, in 2028 first-time homeowners ready to become second steppers will need an average £150,000 to climb the property ladder.
Family homes at a premium
Sam Mitchell, CEO of House Simple, said: "While we're seeing a positive trend with more first-time buyers getting on to the property ladder, second steppers - primarily those upsizing from a flat to a terraced or semi-detached house - still face a major jump to transition from a starter home to their family home.
"Despite Government commitments to building more stock, family homes remain at a premium.
"The problem is particularly acute in London and the south of England where the gap for second steppers can feel more like a chasm.
"As a result, second steppers' migration has always been a major driver of house price inflation in commuter towns in the home counties and increasingly as far afield as areas of the south-west.
"Things look brighter for those living or heading north where house prices, although on the up, are still in affordable territory."
Northern price differential most affordable
The most affordable part of England for second steppers is in Durham. There the price differential between the first and second rungs of the property ladder is just £23,318.
Northern towns feature strongly in the top 10 of most affordable towns for second steppers, which includes Doncaster, Bradford and Hull in Yorkshire and the East Riding, and Blackburn, Oldham and Liverpool in Lancashire and Merseyside.
In London, the average price differential for second steppers is £343,134. Oxford and Cambridge are also among the cities where second steppers face a huge financial leap to climb up the property ladder, according to the House Simple research.