Couples are stuck in first homes until they hit 40

FAMILIES are struggling to move up the housing ladder with many trapped in the first home they bought.

Figures show that the average age of a ‘second-stepper’ has risen to 40. Five years ago, the average age at which buyers moved on to their second home was 37.

Many former first-time buyers looking to upsize because they now have children bought their flat or house before prices crashed in 2007. As a result, they have little equity in their property – or may even have negative equity – and face difficulties getting a big enough mortgage to allow them to upsize.

Figures from Lloyds TSB show that home-mover mortgages were down by two per cent in the first half of 2013. At the same time, the number buying their first home was 19 per cent up on last year, suggesting Government schemes to get people on to the housing ladder are having some effect.

The difference between the typical cost of a second-stepper home and the amount of equity they

‘Affordability has improved’

have has fallen in the past year, though. In June 2013 it was 4.4 times average annual earnings, down from 4.9 a year earlier.

London was the least affordable with a ratio of 5.7, with the Midlands the most affordable at 3.1.

On average, those looking to upsize have equity worth 13 per cent of the price of a typical second-step home. But in 2005, the average second-stepper was able to fund 44 per cent of their new property with equity built up in 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.’