'Second steppers' face higher costs

Estate agentHomeowners trying to take their second step on the housing ladder have seen their trading up costs more than double over the last decade, a report has found.

Almost one in five would-be "second steppers" surveyed by Lloyds TSB said they might need to rely on the "bank of mum and dad" or even grandparents to help them plug the gap.
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The price difference between a typical first-time buyer flat and a second stepper semi-detached home has reached £43,800 across England and Wales, soaring by 143% from £18,000 10 years ago. The gap has increased by £3,000 over the last year, Lloyds said.

People in the South East face the biggest premium to take their second step on the housing ladder, needing almost £94,000. Londoners face the second highest at around £64,000. The smallest costs to climb the second rung of the property ladder were found in Wales, at £14,000 typically.
Three-quarters of second steppers (77%) said they plan to use the equity in their first home to help fund their move, while three-fifths (59%) will plunder their savings. Some 18% said they were considering asking family members to help them out financially.

Second steppers thought they would need to borrow more than £19,000 typically from family or friends, compared with around £13,000 when similar research was carried out a year ago.

Many second steppers bought their first home around the height of the property boom, meaning that they might have struggled to move on as they have little or no equity left in their property.

However, there have been recent signs that it is getting easier for people to get access to a mortgage and move house following the launch of Government initiatives such as Funding for Lending, which have prompted an increase in mortgages on the market and lenders to slash their rates.

The Government's flagship Help to Buy scheme, which will be fully fired into action next year, is specifically aimed at helping people with smaller deposits, either existing home owners and first-time buyers. Help to Buy has already come under criticism amid fears that it could cause a property bubble by artificially propping up house prices and meaning people stretch themselves further into debt.

However, the Council of Mortgage Lenders (CML) recently said the scheme had the potential to ease the pressure on hard-pressed parents who are being called on by their children to help them out financially.
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