Climbing the property ladder more durable than EVER with a £119,000 soar from first to second houses

Taking the second step on the property ladder is now harder than ever as buyers need to plug a £119,000 gap, figures reveal.

Those looking to trade in their starter home for a larger property are faced with a massive shortfall due to flatlining flat prices, according to property portal Rightmove.

It means second-steppers could be forced to overpay their mortgage or save thousands of extra pounds to be able to move into a family home.

The average price tag for a zero-to-two-bedroom home, a typical property for a first-time buyer, is £226,955 this month, the property website says. 

But sellers face a 52 per cent price jump up to a typical three-to-four-bedroom home, which are listed for £345,857 on average.

That’s the widest the price gap has ever been in percentage terms, Rightmove says, and the pounds and pence difference of £118,902 has only been larger on two occasions.

The chasm means that those looking to move into their second home with a 20 per cent deposit would need to jump from having £45,391 in equity to £69,171, if purchasing an average property at its listing price.

This can be done either by overpaying a mortgage, or saving in cash, or the boost can naturally occur if the value of a property has soared since purchase.

However, house prices in many areas have flatlined in the past year or two, meaning some sellers might not have seen a big increase. 

For example, Nationwide’s latest house price index found that the typical home went up by 1 per cent or £2,303 in the year to the end of February, reaching £273,176. 

Second steppers would also need to be approved to borrow a larger amount from a mortgage lender, which means they may need to have a higher income than they did when purchasing their first home.

Matt Smith, mortgage expert at Rightmove, says: ‘Inevitably trading up means borrowing more. 

‘Home movers usually take advantage of having built equity since the purchase of their first home to fund a larger deposit, meaning they have access to cheaper rates. If equity is reduced, this means home movers are likely to need to look at alternative strategies.

‘Plus, they can look at taking more incremental steps up the housing ladder, or scout out alternative, cheaper locations.

‘If buyers are facing the prospect of moving up the ladder at higher loan-to-value ratios, lenders do have options to support this – powered up by recent changes to affordability rules by the regulators.’

Second steppers in south east face largest gap

This price chasm is wildly different across the country, which means buyers face a postcode lottery that could mean they need to borrow tens of thousands of pounds more.

The place with the worst gap is the south east, not including London. There, an average first-time buyer home is listed for £286,748 while a second-step home is a cool £460,781, a 61 per cent hike.

London is facing a 60 per cent rise for second homes while in Scotland the difference is 57 per cent.

The place with the smallest gap between a first and second home is Yorkshire and the Humber where it is 38 per cent. Starter home price tags average £182,029 while second-stepper properties are listed for £25,885.

Wales also has a smaller gap at 40 per cent, and the East Midlands too at 46 per cent.

Flatlining flat price tags to blame

Flat prices – which make up a large chunk of typical starter homes in some areas – have seen lacklustre growth due to issues with leasehold service charge fees.

And as the age of the average first-time buyer in England was 34 in 2024-25, many want to go straight on to the property ladder with a house, which is depressing flat values and in turn boosting house price tags.

New-build flats saw a surge of demand between 2013 and 2021 due to the Government’s Help to Buy scheme, which drove prices higher.

But now buyers of these flats don’t have the benefits of this scheme behind them.

As their popularity dwindles, their prices have too as sellers have been forced to offer discounts to lure movers to the table.

Almost two in five flat sellers in England and Wales last year got less back than they paid for their property.

It means that first-time buyers in these properties don’t see a strong surge in the equity they have built up in their property simply due to a rise in their property price, which makes it difficult to trade up.

Colleen Babcock, property expert at the portal, adds: ‘The race for space that began during the pandemic caused a major shift between houses and flats, and it’s a shift we’re still feeling today.

‘Flats, which make up a much larger share of first-time buyer homes and markets like London, have seen slower price growth, while houses have pulled further ahead. 

‘Concerns around leaseholds and ground rents are also likely weighing on flat prices.’

The price gap between an average flat an average home of any size is 26 per cent, with each being listed for £301,338 and £379,526 respectively, Rightmove says

And over the last ten years, the average price of a flat has only increased by 8 per cent, compared with a 34 per cent increase for houses.