The difference in price increases over the last few years between houses and flats could leave many people who are looking to move up the property ladder struggling to afford a mortgage, it's been claimed.
According to price comparison site uSwitch, many people are relying on equity from their existing home, which in a lot of cases will be a flat that they purchased as their first property, in order to put down a deposit on a larger mortgage.
It said that as many as 44 per cent of people who are planning to move out of their first home in the near future are planning to use the equity they get from selling their property to be able to afford a house.
However, uSwitch has cautioned that flat owners may face problems with obtaining a mortgage, due to the fact house price rises have outpaced those for flats in the last decade. It said that the price of a detached house, for example, has climbed by 21 per cent when compared to 2006's prices, but in the same time, flats have seen their value rising by an average of just 15 per cent.
As many as 62 per cent of second steppers plan to move from flats to houses, but uSwitch said it's vital anyone planning to do so has additional savings over and above the equity of their home to fall back on when looking to raise a deposit.
However, this does not seem to be the case for many people, with the survey showing that 61 per cent of second time buyers have not saved anything towards deposits and additional up-front costs of buying a home.
"Second steppers have been lulled into a false sense of security by rising house prices. In some parts of the country houses have far outstripped flats and so if you are looking to move up the property ladder you need to carefully plot your next steps," said Tashema Jackson, money expert at uSwitch.
"Whatever your situation, plan ahead to find out what you can afford and how much you need to save. Don’t just take the first mortgage offered to you, consult a range of providers to find the best deal for you as this will help prevent paying over the odds."