Some 65% of Scotland's second steppers will be hoping to use savings while 73% to use equity in their current property to fund the move to their second property. However, some 12% are also considering going back to live with their family to ask for financial support.
The average loan size first time buyers received from family or friends remained over £13,000. Yet, the amount requested by second steppers to help them move up the ladder has increased by over £7,000 in the past 12 months to reach £16,198, up from £9,063 in 2011.
The research highlights that 61% of second steppers have wanted to climb up the ladder in the past 12 months but have been unable to do so as they face an increasing number of challenges.
Over half, 56%, of all those questioned agree that not having enough saved to cover the deposit is preventing them from taking the second step on the property ladder. However, over two thirds, 68%, of second steppers are struggling to find a suitable or affordable property.
The additional capital needed by second steppers to trade up, calculated as the price difference between a typical first time buyer flat and the house desired by many second steppers, currently stands at an average of £21,205, a 164% increase on the £12,956 that was required 10 years ago.
Whilst 48% of first time buyers surveyed in Scotland are currently living in flats some 56% hope their next move will be to a three bedroom house. The average value of a flat currently stands at £111,496 compared with £132,700 on average for a semi detached house.
This means that those looking to make this move face a 19% premium just to trade up, before adding on the cost of moving or the potential that there may be an equity shortfall in their current property.
‘We already know that Scotland's second steppers face a number of tough challenges, and in many ways have been the hardest hit by the subdued housing market, so it is unsurprising that they are struggling to fund the gap needed to trade up to their preferred second home,’ said Laurence Mann, head of mortgages at the Bank of Scotland.
‘Parents have long been helping to fund their children's first home, but many are now having to provide further support as they move up the ladder. This indicates that these customers still need further support. To achieve a sustainable housing market we need to see movement throughout the market. If second steppers get stuck on the first rung, movement at the bottom half of the ladder comes to a standstill,’ he added.
