According to research carried out by mortgage lender Lloyds, increasing property values have led to an increase in the proportion of equity which existing homeowners are sitting on, which in turn has boosted the ‘affordability’ of their next home .

Lloyds calculated affordability – as the average price of a typical second stepper home less their current equity position – at 4.2 times gross annual average earnings in August 2013 compared with a ratio of 5.0 in August 2012.

Now, a typical prospective second-time buyer has 18% or £31,174 of the price of an average second purchase home, a jump from -1% in 2012. However, this extra affordability isn’t feeding through to the homemover market with 3% fewer on an annual basis or 176,700 homemovers completing on Lloyds’ mortgages to the end of July.

Nitesh Patel, housing economist at Lloyds TSB, said:

“Housing affordability for the typical second stepper has improved in the past year. Nonetheless, many potential Second Steppers who bought their first home around the time of the peak in house prices in 2007 may still be unable to move because they have very low, or negative, levels of equity in their homes.

“The lack of equity in many people’s homes largely explains why the number of homemovers in the first seven months of 2013 was broadly unchanged against the previous year.”

In 2013, typical second stepper held equity is at its highest since 2008, but this is still low against ten years’ ago.

In 2003, the typical mover could fund close to half (45%) of the purchase cost of their next home through equity built up in their first property. The North-South divide is still a huge factor determining affordability.

The West Midlands and East Midlands (both 3.1) are the most affordable regions for those in their first home looking to take their next step on the property ladder, while London (5.7), South West (4.5) and South East (4.4) are the least affordable.