Almost half of second time buyers in the UK have no plans to save for a deposit to buy their next home as they believe the equity in their current property will pay for their deposit, new research shows.

Some 44% plan to rely on equity but the growth in house prices has outpaced flats over the last 10 years potentially leaving buyers short when they look to move up the ladder, according to the study from price comparison site uSwitch.

However, over the past decade, prices for terraced, detached and semi-detached properties have risen by 21% while flats have increased by 15% over the same time period. First time buyers often buy a flat and then look to move up to a house.

The research found that the widest disparity in growth rates between flats and houses can be found in Preston where the difference is 16.5%, Colchester 10% and York 9%. At the other end of the spectrum, flat owners in Aberdeen, Wolverhampton and Milton Keynes have seen their property prices increase in price more than local houses at 10%, 3.5% and 1.7% respectively.
 
With 62% of second steppers looking to buy a house, the firm suggests that they should consider starting to save now to avoid a falling into a deposit deficit.

The study also showed that 61% of second time buyers haven’t saved anything towards the big upfront costs such as stamp duty, surveying costs or removal costs which can amount to almost £12,000.
 
‘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 a 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,’ Jackson added.