Second-step homebuyers face toughest conditions for 25 years

In Yorkshire the average homeowner would have to borrow 4.6 times an average salary to afford a second home today, which would typically be a semi-detached house with three bedrooms, to bridge the gap between equity gained on their first house and the full cost of their second one. A decade ago they would only have had to borrow 1.6 times.

Yorkshire and the Humber recorded the second biggest deterioration in the country in homeowners being able to afford their second home on the ladder over the past decade, following the North where buyers have to find 4.8 per cent of the average salary compared with 1.8 times a decade ago.

The review calculates the average price of a typical second-stepper home and works out how much the average homeowner would need to borrow to buy it, if they put down their equity from their first home as a deposit.

In the South East, second-time buyers would have to borrow 6.2 times average earnings now, but needed 3.3 times a decade ago, and in Greater London the average second-stepper had already needed to borrow over four times their salary 10 years ago – the same as today’s Yorkshire second-steppers, but today Londoners need to borrow almost six times their earnings (5.9 per cent).

It is now more affordable for first time buyers to get on to the housing ladder than to go on to buy their second, according to Lloyds.

“The challenges facing first time buyers receive a lot of deserved attention but if we’re trying to achieve a sustainable housing market, we have to look at every rung of the housing ladder,” said managing director of mortgages for Lloyds Banking Group Colin Walsh in the Lloyds Second Steppers report.

“It’s right that we continue to help people buy their first home, but we shouldn’t underestimate the role second steppers have in making that happen. They’re the link between first-time buyers and the rest of the market.”