The UK’s housing ladder is broken: The gap between a starter home and a family home just hit a record high
The UK’s housing ladder is showing serious signs of strain, with the gap between entry-level starter homes and larger family properties reaching a record high, according to new data from property portal Rightmove.
In March 2026, the average asking price for a typical first-time buyer home (0-2 bedrooms) stood at £226,955. By comparison, a mid-market second-stepper home (3-4 bedroom property) carried an average asking price of £345,857.
That represents a £118,902 cash difference, or a 52% premium – the widest percentage gap on record since Rightmove began tracking in 2001.
The group notes that climbing from that first rung to the next is becoming prohibitively expensive for many, potentially locking a generation into smaller properties or delaying family moves altogether.
It added that the disparity has been widening for years, accelerated by shifts that began during the pandemic.
Rightmove notes that the “race for space” drove demand toward houses with gardens and extra rooms, while flats, disproportionately represented in the starter-home category, lagged behind.
Over the past decade, flat prices have risen by just 8%, compared to 34% for houses. The flat-to-house price gap itself has ballooned from £24,010 in February 2020 to £78,198 by February 2026.
Additional pressures on flat values include ongoing concerns around leaseholds and ground rents, which have made them less attractive to buyers.
- The South East shows the starkest divide at 61% (£286,748 to £460,781).
- London follows closely at 60% (£491,661 to £788,528).
- More affordable regions include Yorkshire & The Humber at 38% (£182,029 to £251,885) and Wales at 40% (£183,640 to £257,520).
The cash gap of £118,902 has only been exceeded twice before, in May and June 2025, but the percentage leap in March 2026 marks a new proportional peak, Rightmove said.
Rightmove calculates that securing a 20% deposit on a second-stepper home now requires around £69,171 in equity or savings, up significantly from the £45,391 needed for a starter home – a £23,780 increase.
“Inevitably trading up means borrowing more. If equity is reduced, this means home movers are likely to need to look at alternative strategies, either through reducing their mortgage balance by overpaying, or boosting their deposit through savings,” said Matt Smith, Rightmove’s mortgage expert.
“They can look at taking more incremental steps up the housing ladder, or scout out alternative, cheaper locations.”
