Home movers are turning to higher loan-to-value mortgages as rising property prices and smaller deposits increase the cost of climbing the housing ladder, Barclays data suggests.
The average deposit paid by home movers fell by 24.8% year on year in June, while their average purchase price rose by 1%, according to Barclays mortgage data.
The proportion borrowing at more than 75% loan-to-value increased from 18.2% to 22.1% over the same period as buyers used larger mortgages to bridge the gap.
Barclays said 34% of prospective second-steppers felt stuck in their first property because moving was too expensive. Among recent first-time buyers, 41% intended to keep their next purchase close in value to their current home to limit upfront costs.
However, the average property price paid by home movers was 59.5% higher than that paid by first-time buyers in June. The gap widened by 1.2% year on year.
Family support is also expected to play a part, with 22% of second-steppers saying they would need help from relatives to fund their next purchase.
Affordability pressures varied across the country. Londoners were the most likely to say moving was too expensive, at 37%, compared with 21% of respondents in Wales.
Second-steppers were nevertheless reluctant to compromise on location. Some 65% said they would not move more than 10 miles to find a suitably priced home.
SOLO BUYING BECOMES MORE COMMON
The research also found that buying alone has become increasingly common, although many first-time buyers continue to receive financial support from their families.
Among people who bought their first home before 1980, 15% did so alone and 83% purchased with a spouse or partner. For purchases made since 2020, the proportion buying with a spouse or partner fell to 54%.
Barclays mortgage figures showed that solo buyers accounted for 36.9% of completions in June.
Being single but wanting to own a home was the most frequently cited reason for buying alone, chosen by 36% of respondents. A further 29% valued the independence of solo homeownership, while 22% wanted control over housing decisions.
More than half of UK adults, at 55%, regarded homeownership as the greatest source of long-term financial security.
Among those planning to purchase with another person, 46% said they wanted to live with their co-buyer or buyers. Feeling more financially secure was cited by 24%, while 22% wanted to share responsibility.
Family money remains important for buyers entering the market. Some 39% of homeowners said their parents had given them a lump sum to help buy their first property, rising to 53% among those who became first-time buyers from 2020 onwards.
Lee Chiswell, head of mortgages at Barclays, said: “The cost of moving up the ladder is forcing many second-steppers to evaluate how far their deposit can stretch, whether they need additional support from family, and what they need from their mortgage.”
He added: “At the same time, more buyers are entering the market solo than in previous generations, showing that the desire for independence and long-term security remains strong, even in a challenging market. As housing journeys become more varied, there is no longer a ‘typical’ path onto the property ladder.
“It’s increasingly important that buyers have the confidence and support to make decisions that work for their individual circumstances.”
Julien Lafargue, chief market strategist at Barclays Private Bank and Wealth Management, said: “Affordability has been gradually improving as pay growth outpaces house prices and rates come down from their peak, but the outlook from here is unusually uncertain.
“The Bank of England is holding at 3.75% with a divided committee, and the next move looks finely balanced.
“This alongside elevated policy uncertainty is forcing home buyers to proceed with caution. That said, demand that has paused is waiting rather than gone, and once the rate and policy picture clears, the market appears to have a solid base to build from.”
