Second step on housing ladder tougher than ever

A lack of affordability could make it harder for buyers to move up the property ladder than it was for people to buy their first home, the Bank of Scotland found.

Its latest Homemovers Review looked at conditions for so-called “second steppers”, people who have bought a home and are looking to move into another property.

In June, the average price of a typical second home, minus the amount of equity people have in their current property, was 4.3 times gross annual average earnings – the second-highest affordability rate for second steppers since records began 25 years ago.

This year’s rate is slightly lower than the 4.4 recorded in June last year.

According to the report, first-time buyers pay 3.4 times their average earnings for a property.

Nitesh Patel, housing economist at the Bank of Scotland, said: “It is clearly very concerning that the challenges facing those attempting to take their second step on the housing ladder in Scotland are the toughest for more than a generation.

“This follows the significant decline in house prices over recent years and the subsequent erosion of equity among those who bought for the first time at close to the peak of the market.

“The current problems facing second steppers have serious implications for the wider housing market.”