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Second stepper price gap widens

Rental Property

The price gap between the first and second rung of the UK property ladder has more than doubled since the global financial crash, according to Land Registry data analysed by modular housebuilder Project Etopia.

Sold house price data shows that the price difference between an average flat and terraced house has grown by 141% — from £20,744 to £49,916 — since 2008.

The average price of a sold flat was £145,276 compared to £195,191 for a terraced house.

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.”

The biggest gap for second steppers was in Luton, where the average price 56.8% higher for a terraced house (£220,778) compared to a flat (£140,820).

The smallest gap was in Manchester with the average price difference between a flat (£164,188) and a terraced house (£171,286) being just 4.1%.