Lloyds TSB revealed that 61% of so-called ‘second steppers’ are unable to sell their first home, with 22% saying it is harder to move up the property ladder than to get on it in the first place and 43% believing it is equally difficult.
The report found that home affordability, negative equity, higher deposits, lack of buyers and the cost of moving are among the challenges facing second steppers.
Lloyds revealed that home affordability for first-time sellers is at its worst for 25 years and is now less favourable than for first-time buyers, while many have ended up in negative equity as house prices have fallen, having bought at the peak of the market.
Lloyds TSB estimated that the typical second stepper will be in a negative equity position of £9,902.
Indeed, raising a deposit was a key concern for 71% of second-time buyers because of a lack of equity, with 36% admitting to having no deposit.
The average deposit for a typical second stepper in 2011 was £60,670 – more than double the average deposit required in 2001 of £24,783, Lloyds found.
In addition, almost half of first-time sellers said that the cost of moving was one of their main challenges, with the average cost having risen 69% since 2001 to £8,922 in 2011. This is the highest level since the peak of the housing market and more than three times higher than for first-time buyers.
Lloyds research showed that 72% of second steppers want the government to take action to help people sell their home, while 49% want their mortgage lender to offer new products to overcome the problems they face.
Nevertheless, first-time sellers are taking action to help themselves, with 58% saving to help fund their next more and 27% overpaying on their mortgage to help build up their equity.
Stephen Noakes, mortgage director at Lloyds TSB, said: “It is vital that this group of home movers receive more support and attention as they play an intrinsic role in getting the housing market moving again.
“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 and this bottleneck will not only restrict the supply of starter properties but will have a knock on effect across the whole of the housing market.”
