Second steppers are struggling in Scotland

 

For most of us, we only expect to need to borrow a deposit for a property the first time we buy. However, for many, they have to ask their parents for more money when buying their second home. “Second steppers” in Scotland have to ask for even more money the second time they want to move because getting a loan for a property is becoming even tougher to get.

Nearly one in six of these second steppers are having to ask for a contribution as the property most want to buy (a three bedroom house) has almost doubled over the last 10 years.

When buying property getting on the infamous ladder is hard enough, but what happens when you want/need a bigger property and still can’t get a loan? A recent report from the Bank of Scotland has shown that 65% of these second steppers have wanted to move within the last year but haven’t been able to, due to a number of difficulties.

The report showed that 46% of people wanting to buy their first homes borrowed money and 90% of them asked for support from their parents.

What Has Happened?

In Scotland, on average, first time buyers asked for £13,000 and will be asking again for a further £10,000 for the deposit on their next property and step up the ladder.

Currently two thirds of first time buyers are living in flats or terraced housing that have an average value of £106,587. Half of first time buyers hope that their next property will be a three bedroom house which on average has a value of £125,029. As a result many face a premium of 17% just to trade up, as well as this there will be the cost of moving or maybe equity shortfall in their current property. As well as this, there are many additional costs once they have moved, more furniture, higher bills and of course property insurance.

What Will Happen?

Laurence Mann who is the head of mortgages for the Bank of Scotland said, “We already know that second steppers in Scotland face a number of tough challenges, and in many ways have been the hardest hit by the subdues housing market, so it is unsurprising that they are struggling to fund the gap needed to trade up to their preferred second home.

“Parents have long been helping to fund their children’s first home, but many are now having to provide further support as they move up the ladder. This indicates that these customers still need attention and support. 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.”