Those living in their first home are increasingly looking to move into bigger four bedroom detached houses, reducing the number of steps they’re taking on the property ladder to get to their long term family home.
According to the fourth annual Second Steppers Report from Lloyds Bank, in 2010, three bed semi-detached properties were the preferred second step. At that time, 60% said that they were looking to move to a semi-detached house, with 48% also saying detached properties would also be an option. Fast forward to 2014 and 54% of Second Steppers stated they would be looking to next move to a detached house, now the most preferred option, with semi-detached properties reducing to 51%.
Three bed properties remain the preferred size of house in 2014 (45%), although this has reduced significantly since 2010 (down 10 percentage points), with four bed properties seeing a significant increase in this time. 31% now say they are looking for a four bed house, an increase of seven percentage points since 2010.
Second Steppers are becoming increasingly prepared for their next move and taking their time to make the jump up to a family home. On average, they are spending 19 months longer in their first property than they expected as they continue to save and build up equity. The average Second Stepper spends four years and five months in their first home. Only 6% of these people intended on staying put for over six years, however in reality, 36% have done this.
37% have increased their monthly savings in the last year, and 41% are overpaying their mortgage. As a result, the proportion of people concerned about the size of deposit they require to move also fell in the last year, from half 50% of Second Steppers in 2013, to 37% in 2014. This suggests that changing behaviours and increased levels of equity are allowing people to put more towards their next deposit and save for bigger homes.
The findings also show that Second Steppers may be delaying having a family until they can move into a suitable property. Those moving as result of needing more room to start a family have reduced by nine percentage points in two years, to 22%, from 31% in 2012.
Value for money remains a key driver for purchasing a property, with 46% of the Second Steppers saying so. This figure has reduced by six percentage points in the past year however. Finding a nice area to live in is growing in importance and has seen the greatest year on year increase. In the past year, the number of respondents selecting this has risen by six percentage points, to 38%. Both of these changes in the past 12 months suggest a more long term perspective for Second Steppers, looking to move into a more permanent family home.
Andy Hulme, mortgages director at Lloyds Bank, said: “Second Steppers are increasingly looking to move into their long term family home for their next move, with detached houses now the property of choice for this group.
“They’ve realised that they need to be savvy with their money, with more Second Steppers saving more each month and overpaying on their mortgage. Higher levels of equity and larger savings pots are allowing them to put more down in deposits, helping them make this big jump up the ladder.”
The findings show people living in their first home have to find an extra £58,400 to plug the gap between the sale price of their current property and the cost of the house they would ideally move to. This figure has significantly risen by £14,900 since 2013 and £17,900 in 2012, when the figure was £40,500.
However, it seems people are prepared to take this jump to avoid making more frequent and more costly steps up the housing ladder. Fees and charges associated are still seen as the biggest barrier to moving home for nearly half of Second Steppers (46%).
