This phenomenon is not exclusive to those taking their first step onto the property ladder. Existing homeowners are seeing the cost of buying increase by 11%.
Newly released research by estate agent comparison site, GetAgent.co.uk, has revealed which areas of the British housing market present the biggest step for first-time homeowners when it comes to climbing the next rung of the property ladder.
Despite the increase, the price paid by first-time buyers continues to sit considerably lower than that paid by existing homeowners at £214,452. However, GetAgent’s research shows that having done the hard work, some first-time buyers then face forking out far more in taking that second step on the ladder.
The current average paid by existing homeowners across Britain is £299,590, meaning the average cost of taking a second step up the ladder is 40% more expensive than the first, with this gap increasing from 38% just a year ago.
Regionally, Scotland is home to the biggest step between the first rung and the rest of the ladder, with existing homeowners paying 49% more than first-time buyers. The South East (47%) is also home to one of the largest steps, as is the South West and West Midlands (39%).
However, at a local level, this gap grows even further. In Elmbridge, the average first-time buyer pays a notable £453,521 for the privilege of placing their first foot on the property ladder. However, should they want to climb even further, they face an average price of £791,740 - 75% more.
Woking is also home to a considerably large gap between first and second home ownership at 67%, with Surrey Heath (64%), Mole Valley (63%), Horsham (63%), Clackmannanshire (61%), Perth and Kinross (61%), Stirling (60%), Waverly (60%) and East Dunbartonshire (60%) also making the top 10.
Despite first-time buyers in London facing perhaps the toughest financial obstacle when looking to climb the ladder initially, once they have the capital presents a far smaller gap between the average price paid by first-time buyers and existing homeowners.
Six of the top 10 smallest gaps are located in London, with FTBs actually paying more in the City of London compared to existing homeowners, while in Tower Hamlets the gap is just 6%.
Other areas that present the easiest step between first and second homeownership include Blaenau Gwent (15%), Kingston upon Hull (18%) and Gosport (15%).
Colby Short, Founder and CEO of GetAgent.co.uk, commented: “While we’re a nation of aspirational homeowners, realising this aspiration continues to grow ever harder for those looking to buy their first home. Although they pay far less than the rest of the market, it still amounts to a huge financial obstacle and, unfortunately, the cost of climbing the property ladder continues to climb.
"In fact, taking that second step will also come at a cost which in some areas can be as much as 75% higher than the price paid for a first home.
"Of course, the plus side is that many are able to better overcome this additional cost by financing their next purchase via a mortgage and with the sale of their existing home. In addition, many will have also benefited from an increase in the value of their home which may also help them bridge the gap between rungs.”
