Stuck on the first rung!

Additionally, more than a fifth (22%) of respondents believe it is actually harder to move up the ladder than it was to get on it in the first place. Almost half (46%) of second steppers believe it is equally difficult as taking the first step, to move up the ladder.

Second steppers are currently looking to stay longer in the first home, a sign that difficult market conditions are changing their expectations. In 2010, they expected to spend four years in their first home, whereas now they are more likely to plan to stay for five years. On average, second steppers seeking to sell their first home, have already had this on the market for seven months, whilst one in eight (12%) have marketed their property more than once.

Over half (53%) are looking to move as they feel that their current property has become too small for their needs; 24% are expecting to start a family and need more room; 44% plan to move to a new area, whilst 12% are relocating for work. Almost two thirds (65%) of second steppers believe that the level of deposit required in a new mortgage arrangement is the main challenge for them, and as a result is a key reason they have not been able to move up the housing ladder so far.

The average deposit for a typical second stepper in 2012 was £58,836, almost double the average deposit required in 2002 (£31,189). Meanwhile, the LloydsTSB research indicates that second steppers have on average just over £40,000 of equity in their current property, with almost a third (29%) having less than £20,000, leaving a considerable equity shortfall. Almost three fifths (58%) expected to have more equity in their property by now.

Around a third (28%) don’t have enough of a deposit saved at present; whilst one in ten (11%) now need more of a deposit than originally expected. Around two in five second steppers have lost some (27%) or all (12%) of the deposit they paid on their first property, due to declining house prices since they purchased their first home. The average house price paid by a first-time buyer has reduced by £20,095 since the typical second stepper in 2012 bought their first home in 2007.

Many second steppers appear to be doing what they can to make the move up the ladder as soon as possible; with over two thirds (69%) saying they are saving to fund the move. Within this, 37% continued to save after buying their first home, whilst 32% have started saving again specifically to fund their move. Separately, over a third (35%) are overpaying on their mortgage. Savings are set to play a key part in funding the deposit needed to move with three fifths of second steppers (59%) expecting to use savings to help raise the deposit for their next home.

Almost two fifths (38%) of second steppers blame the lack of affordable housing available as a key reason they have been unable to move up the ladder, whilst 15% are waiting for property prices to come down and be more affordable before making the move. Additionally, the costs associated with moving are creating another barrier, with a third of second steppers (32%) agreeing that stamp duty is too high, whilst a fifth (20%) are concerned about the overall cost of moving. Despite all the difficulties, almost a third of second steppers (31%) think the housing market will improve this year, with a little help from Government and lenders!