Second steppers see equity position improve: Lloyds

Second steppers see equity position improve: Lloyds

Over the past five years conditions for ‘second steppers’ in the housing marketing have significantly improved, research from Lloyds Bank has revealed.

Seven in ten second steppers feel that their position has improved over the last year, with higher house prices increasing the equity of those still living in their first homes.

Typically, second steppers would have bought at the bottom of the market in 2009 when prices were at their lowest, according to Lloyds, with the average price of a typical first time buyer home now 31 per cent higher than in 2009.

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As a result, this group have an average equity level of £87,000, equivalent to 29 per cent of the average price of typical second stepper home - £304,963.

Lloyds said that the estimated average equity level has risen by over £36,000 in the past year, up from £50,655 due to an increase in the prices paid for first-time buyer homes.

However, the research showed that many second steppers continue to face a £128,000 price gap to jump up the housing ladder, to fund their preferred second home of a detached property.

Overall, 33 per cent think it will be easier to sell this year, almost treble that of 2012, while 37 per cent are keen to make the move now to take advantage of a more buoyant housing market.

Lloyds also found that last year saw the highest number of first-time buyers enter the market in seven years, contributing to second steppers being more confident that there is the demand coming through to allow them to sell.

Andy Hulme, Lloyds Bank’s mortgages director, said that 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.

“Whilst challenges remain as second steppers try to bridge the gap to the next rung on the ladder, a steady rise in property values in 2015 should further ease the constraint on many and this will have a positive knock-on effect for the whole of the housing market.”