'Second-steppers' tap parents for support - again

Younger buyers are revisiting the 'Bank of Mum and Dad' to afford a move up the housing market.

The latest trend in property ownership reveals children are going back to the "Bank of Mum and Dad" for a second time in a bid to beat a property market that is still rising.

One in six so-called "second-steppers", those looking to sell their first home and move up the market, are turning to parental help as they try to plug the estimated £41,000 gap between the value of their first and second homes, Lloyds TSB has found – almost 200 per cent up from the £14,000 required to make a similar move 10 years ago.

Most hopeful second-steppers believe cash concerns will impact on the purchase of their new house, having failed to save enough to cover the jump – typically from a flat or terraced house to a semi-detached property worth an average of £189,312. And property prices continue to rise – up 0.5 per cent in May, according to new figures from Halifax.

"We already know that second-steppers face a number of tough challenges," said Stephen Noakes, mortgage director for Lloyds TSB.

"In many ways they have been the hardest hit by the subdued housing market, so it is unsurprising that they are struggling to fund the gap needed to trade up to their second home.

"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."

"Today's second-steppers are often those who bought their property at the top of the market and with the possibility of a high loan to value mortgage," said Ray Boulger, senior technical manager at John Charcol.

"They now find that the equity growth they expected hasn't occurred and they are facing a shortfall as they now look for family houses rather than starter homes.

"It may be a good opportunity for families to work together, as parents or grandparents with cash on deposit could gain more from lending it to their children and earning a better return in interest, bearing in mind tax implications, than they would with a high street bank.

"In general, individual families may be happy to help, but the knock-on effect could be a greater social divide as those parents who own their own property are probably more comfortable in helping their children get further up the ladder."

But almost half of first-time buyers had already received an average of almost £13,000 in financial help for the deposit on their first home, and the news comes on the back of worrying figures which show that the number of older people owing money has risen sharply in the last year.

Around 1.8 million pensioners live in poverty according to Age UK, and now one-in-five people aged 60 and over have said they owed money on a mortgage, credit card or loan. More than one-in-10 had to borrow money to pay their rent or mortgage.

"It is extremely worrying that such a high number of older people report having debts and have had to borrow money just to keep a roof over their heads," said Michelle Mitchell, charity director general at Age UK.

"Most older people live on a relatively small income so making debt repayments can be a worry."

Independent Partners; Do you need financial advice on your investments, pension or insurance? Book a free consultation with an independent Financial Adviser at VouchedFor.co.uk

A daily miscellany of general election facts, figures, trivia and traditions
voicesThere's still time for someone to do something to make us care
Life and Style
Arts and Entertainment
Michael Corleone, played by Al Pacino, goes back to his family's Sicilian roots in the first 'Godfather' film
Kim Kardashian speaks on the Today show about her step-father's transition
Wenger and Mourinho square-up to each other earlier this season
sportAll the action from today's Premier League, including Everton vs Man Utd and Chelsea vs Arsenal
Tepper had a stunningly successful career as a songwriter
Arts and Entertainment
Len Blavatnik
Finacial products from our partners
Property search
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Ashdown Group: Treasury Assistant - Accounts Assistant - London, Old Street

    £24000 - £26000 per annum + benefits : Ashdown Group: A highly successful, glo...

    Ashdown Group: Business Analyst - Financial Services - City, London

    £50000 - £55000 per annum: Ashdown Group: Business Analyst - Financial Service...

    SThree: Trainee Recruitment Consultant

    £18000 - £23000 per annum + OTE £45K: SThree: At SThree, we like to be differe...

    SThree: Trainee Recruitment Consultant

    £20000 - £25000 per annum + competitive: SThree: Did you know? SThree is the o...

    Day In a Page

    General Election 2015: Chuka Umunna on the benefits of immigration, humility – and his leader Ed Miliband

    Chuka Umunna: A virus of racism runs through Ukip

    The shadow business secretary on the benefits of immigration, humility – and his leader Ed Miliband
    Yemen crisis: This exotic war will soon become Europe's problem

    Yemen's exotic war will soon affect Europe

    Terrorism and boatloads of desperate migrants will be the outcome of the Saudi air campaign, says Patrick Cockburn
    Marginal Streets project aims to document voters in the run-up to the General Election

    Marginal Streets project documents voters

    Independent photographers Joseph Fox and Orlando Gili are uploading two portraits of constituents to their website for each day of the campaign
    Game of Thrones: Visit the real-life kingdom of Westeros to see where violent history ends and telly tourism begins

    The real-life kingdom of Westeros

    Is there something a little uncomfortable about Game of Thrones shooting in Northern Ireland?
    How to survive a social-media mauling, by the tough women of Twitter

    How to survive a Twitter mauling

    Mary Beard, Caroline Criado-Perez, Louise Mensch, Bunny La Roche and Courtney Barrasford reveal how to trounce the trolls
    Gallipoli centenary: At dawn, the young remember the young who perished in one of the First World War's bloodiest battles

    At dawn, the young remember the young

    A century ago, soldiers of the Empire – many no more than boys – spilt on to Gallipoli’s beaches. On this 100th Anzac Day, there are personal, poetic tributes to their sacrifice
    Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves

    Follow the money as never before

    Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves, reports Rupert Cornwell
    Samuel West interview: The actor and director on austerity, unionisation, and not mentioning his famous parents

    Samuel West interview

    The actor and director on austerity, unionisation, and not mentioning his famous parents
    General Election 2015: Imagine if the leading political parties were fashion labels

    Imagine if the leading political parties were fashion labels

    Fashion editor, Alexander Fury, on what the leaders' appearances tell us about them
    Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

    Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

    The architect of the HeForShe movement and head of UN Women on the world's failure to combat domestic violence
    Public relations as 'art'? Surely not

    Confessions of a former PR man

    The 'art' of public relations is being celebrated by the V&A museum, triggering some happy memories for DJ Taylor
    Bill Granger recipes: Our chef succumbs to his sugar cravings with super-luxurious sweet treats

    Bill Granger's luxurious sweet treats

    Our chef loves to stop for 30 minutes to catch up on the day's gossip, while nibbling on something sweet
    London Marathon 2015: Paula Radcliffe and the mother of all goodbyes

    The mother of all goodbyes

    Paula Radcliffe's farewell to the London Marathon will be a family affair
    Everton vs Manchester United: Steven Naismith demands 'better' if Toffees are to upset the odds against United

    Steven Naismith: 'We know we must do better'

    The Everton forward explains the reasons behind club's decline this season
    Arsenal vs Chelsea: Praise to Arsene Wenger for having the courage of his convictions

    Michael Calvin's Last Word

    Praise to Wenger for having the courage of his convictions