The UK housing market has become the most unaffordable for "second-steppers" in 24 years, the bank said.
It said that first-time buyers intended to stay in their first home for an average of four years, suggesting many potential second-time buyers bought around the peak in 2007.
The home affordability ratio has risen to 5.2 for second-time buyers - the highest level since records began in 1987. The ratio for first-time buyers is 4.1. In 2007 the reverse trend was the case.
The decline has resulted from a fall in the amount of equity they have, driven by the fall in house prices since 2007. The average price paid by a first-time buyer has fallen by 23pc since the peak, Lloyds TSB said.
"The issue of second-stepper affordability is a key one in trying get the housing market moving again with the current difficulties in this segment of the market restricting the supply of starter properties for first-time buyers as well as preventing many of those who need to move from doing so," said Suren Thiru, housing economist at Lloyds TSB.
Those potential second-steppers who bought their home in 2007 are estimated to be in £10,000 of negative equity on average.
The south east of England is the least affordable region for second-time buyers in the UK, followed by London. The most affordable regions are the west and east midlands.
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