As late as 5 years ago an average second home was bought at
35. This is now changing as equity in many families homes is preventing them from upsizing until they are 40.
The difference between the average cost of a second home and
the amount of equity has fallen in the past year. In June 2013 it was circa 4.4
times average annual earnings, down from circa 4.9 in 2012.
Families looking to upsize now tend to have equity worth 13
per cent of the price of a typical second-stepper home. To put it in
perspective, when you compare this to 2005, the average second home buyer was often
able to secure 44 per cent of their second home with equity from the first.
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.”
“Many of these homeowners may still be unable to move
due to having either very low, or negative, equity in their homes”
Figures from Lloyds TSB also show that home-mover mortgages
were down by two per cent in the first half of 2013. That contrasts with first
time buyers who are up 19 percent year on year.