Home affordability for Second Steppers – those home owners still living in their first home but looking to take their next step up the property ladder – has improved in the past year as a result of higher equity levels.
According to the , according to the latest Lloyds TSB Homemovers Review, housing affordability for Second Steppers – calculated as the average price of a typical Second Stepper home1 less their current equity position2 – stood at 4.4 times gross annual average earnings in June 2013 compared with a ratio of 4.9 in June 2012.
A typical Second Stepper’s current equity position accounts for 13 per cent (£21,200) of the price of an average Second Stepper home, a rise from one per cent in 2012.
Although the position has improved for those looking to put down a deposit on a new home, for some potential second home movers this may still not be sufficient to put towards a deposit when also taking the cost of moving into account.
There were around 149,000 homemover mortgages in the first half of 2013, marginally (two per cent) lower than a year earlier – low consumer confidence and a fragile economy impacted transactions in the early part of 2013. This is in sharp contrast to the 19per cent increase in first-time buyers. The average homemover deposit in 2013 is £70,540 and the average age of a homemover is 40.
Nitesh Patel, housing economist at Lloyds TSB, said: “Housing affordability for the typical Second Stepper has improved in the past year. Nonetheless, there are many potential Second Steppers who are still in their first home which they bought in the run-up to, and at, the peak in house prices in 2007.”