A new report from the Bank of Scotland has revealed that those looking to take their second step on the property ladder need to find an extra £114,659.
The bank’s Second Stepper report tracks the challenges faced by first-time sellers and found that 50% of Second Steppers believe it will be more difficult to sell their home this year, citing concerns over the economy, the size of the deposit required, and a shortage of family-friendly properties.
On a more positive note, strong house price growth has helped those still living in their first homes gain a healthy equity windfall. Today’s typical Second Steppers bought their first property when the average price was £120,664. Based on the latest house price figures, selling their home now for the average first-time buyer price of £139,284 would provide them with an average equity of £48,738.
This average equity of £48,738 is equivalent to roughly 20% of the average price of a typical detached home (£253,944).
The report also found that the typical gap between the sale price of a Second Stepper’s first home and the cost of their desired next property is £114,659. However, the average equity of £48,738 from the sale of their first home can help reduce this gap by 43%, meaning that Second Steppers still need to find an extra £65,922, either by adding more to their existing mortgage or raising the funds from elsewhere.
“Second Steppers are the link between first-time buyers and the rest of the housing ladder,” commented Graham Blair, mortgages director. “They are living in the homes that the first-time buyers need to buy, so it’s vital that this part of the market keeps moving.”
For expert legal advice on buying or selling property in Scotland, contact our specialist property lawyers today.
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