Bigger price gap between first and second homes

New analysis has revealed the price gap between a typical first-time buyer home and a middle-market second-stepper home is the highest it’s ever been.

In March, the average asking price for a zero to two-bedroom home, a typical first-time buyer property, is £226,955, according to property portal Rightmove.

But the trade up to a middle-market, typical three to four-bedroom, second-stepper home would be a 52 per cent jump to £345,857, the widest this gap has ever been.

In cash terms, this is a £118,902 step up from a typical first home to a second property – this gap has only been larger in cash terms on two occasions, in May and June 2025.

If aiming to have a 20 per cent deposit, this jump up would mean that a first-time buyer needs to go from having a £45,391 deposit to having a £69,171 deposit when looking to trade up.

This means they must have built an additional £23,780 in equity, through overpaying on their mortgage, saving up further, or the value of their current property increasing.

This is in addition to being approved to borrow a larger amount from a mortgage lender too.

The gap between a zero to two-bedroom starter home and a three to four-bedroom mid-market home is different depending on which area of Great Britain you live in.

Buyers in the South East are hardest hit on average when trying to trade up for some extra space.

The average asking price for a first-time buyer type of home in the South East is currently £286,748.

A second-stepper home is £460,781 – an increase of 61 per cent.

By contrast, trading up from a starter home is most achievable in Yorkshire and the Humber.

The price of a second-stepper home here is £251,885, a 38 per cent increase on the price of a first-time buyer home which is £182,029.

In the East of England, a starter home is £269,079, compared to a second-stepper at £410,949, which is 53 per cent more expensive.

The lagging price growth of flats, which make up a much larger proportion of typical starter homes, is a big contributor to the growing cost of trading up from a smaller to a larger home.

The price gap between an average flat and an average house of any size is currently 26 per cent.

It’s only been larger once – at 27 per cent in September 2025. The current average asking price of a flat is £301,338, versus £379,526 on average for a house.

Over the last 10 years, the average price of a flat has only increased by eight per cent, compared with a 34 per cent increase for houses.

Colleen Babcock, Rightmove’s property expert, said: “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.”