Experts have warned that a ‘second stepper’ housing crisis may be looming as the cost of buying a home for a growing family continues to spiral.
The price gap between the first and second rung of UK property ladder has more than doubled since the financial crisis – and in some towns is as much as a 56 per cent jump, according to Land Registry data analysed by modular housebuilder Project Etopia.
Second steppers are those who currently live in their first home but are looking to move onto the next step of the ladder – often because their family is growing and they need more space.
These buyers hoping to climb up another rung of the housing ladder are considered critical to the property market functioning properly, but are being stymied by high house prices that mean their next home could cost them 50 per cent more.
The price gap between a first property and a family home has rocketed over the past ten years
Making the second move obviously costs more money. Not only are buyers usually looking for a bigger property, but may also be looking to move closer to a good school or a nicer area.
However, strong house price growth in the years since the financial crash has led to the gap between the typical first-time buyer property home and family home widening considerably.
Families trying to make the move are feeling the difference – some six out of 10 second steppers say it’s more difficult to move up the property ladder than it is to get on it in the first place, while a third need to borrow an average of £25,450 from family and friends to help in addition to a larger mortgage, according to Lloyds.
And the number of families taking huge loans that stretch to more than six-and-a-half times their income in order to move to their second property has soared, according to a recent Times investigation.
Project Etopia looked at current average prices across 100 major UK towns and cities, which revealed why many families are struggling to upsize from a starter home to a larger three or four bed property.
|Town/City||Avg price – flat (£)||Avg. price – terraced (£)||% Price difference|
In 2008, a flat cost £109,726 on average compared to £130,470 for a terraced house – a difference of just 18.9 per cent.
However, in 2019 the average price of a sold flat was £145,276 compared to £195,191 for a terraced house, a difference in price of 34.4 per cent.
This means the gap has grown by 141 per cent from 2008.
If this gap continues to widen at its current rate, within the next decade ‘second steppers’ moving from flats to terraces will face a price differential in excess of £100,000.
Those moving from a flat to a semi-detached house face a similar problem.
The average semi now stands at £248,099, some £102,823 more than the average flat.
In 2008, the average semi cost £159,972 – just £50,246 more than the average flat at the time.
That means the move from flat to semi-detached costs twice as much more than it did a decade ago.
In London, moving from an average £423,844 flat to an average £590,170 semi costs 39 per cent more than it did 10 years ago.
Joseph Daniels, chief executive of Project Etopia, said: ‘There’s a potential housing crisis brewing which could damage the UK property market irreparably if it’s not addressed.
‘The Government has trumpeted its commitment to supporting first-time buyers, but it seems once you’re on the housing ladder you’re basically on your own.
‘We’re told how difficult it is to purchase your first property, but many discover once they’re on the ladder, making the next step up is more problematic.
‘The lack of three and four-bed family properties coming onto the market has seen the price gap between starter homes and family houses widen over the past decade.
‘New family homes aren’t being built fast enough to increase stock levels, leaving many “second steppers” unable to upsize and forced to remain in smaller properties, living under cramped and unacceptable conditions.
‘Despite the Government’s commitment to building more stock, family homes remain at a premium.
‘An urgent solution is needed to rapidly increase the supply of homes to decongest this bottle-neck.’
Six out of 10 say it’s more difficult to move up the property ladder than it is to get on it
As with all things housing related that picture varies dramatically from region to region.
There are still areas that offer an easier step up to the second rung of the ladder.
Moving up the property ladder may prove to be as difficult as getting onto the ladder the first place
Graham Sellar, Santander UK
The North West has four of the five most accessible cities for second steppers.
Manchester offers the smallest gap between rungs for those moving from flats to terraces, with the average price difference between a flat and a terraced house less than £10,000 or 4.1 per cent.
For those in the area looking to move from a flat to a semi however, they can expect to fork out an extra £67,519.
That compares to Luton and Hastings, both in the South East, where the average price of a terraced house is 56.8 per cent and 54.8 per cent higher than a flat, respectively.
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