Slight downturn in the momentum of the property market
According to the Lloyds Bank Group, there were 170,000 homemovers in the first half of 2018, down by 1% compared with the same period last year and down by 16% from the second half of 2017.
This inactivity may be being fuelled by a shortage of suitable properties for sale, but reflects the broader housing market which is showing little sign of movement.
The fall in home mover numbers follows a rise in 2017, which reported the highest level of movers in 10 years. This also coincides with a 3% rise in first-time buyers to 175,500, so that for the first time since 1995, just under half of all house purchases financed by a mortgage were made by home movers – down from 62% in the first half of 2011.
Lloyds Bank Group further reports that despite continuing low mortgage rates, the home mover market has stabilised with little movement in the first half of this year to leave first-time buyers now driving housing activity. This may be in part due to the Help to Buy scheme enabling first-time buyers to purchase a new property, combined with the low availability of the ‘right type’ of homes for those looking to move up the housing ladder.
Carolyn Starling from Ashtons Legal Norwich Residential Property team agrees and adds that the firm is seeing similar trends in the clients that they are acting for, stating that: “It is good to see the number of first-time buyers increasing, as this is helping to keep the property market moving and giving some momentum through the property ladder.”
Lloyds Bank Group have also reported that over the past five years, the average price paid by home movers has grown by 35% from £219,500 in 2013, to £296,900 in 2018 – a record high. The average deposit put down by a home mover has also increased by 31% in the past five years, from £76,300 in 2013 to £99,600 in 2018. Not surprisingly, Londoners have to put down the largest deposit of £189,100 towards the purchase of their next home.
Carolyn Starling adds that having checked the position for East Anglia, “Records actually show that the average price a home mover pays has grown by 46% since 2013 to £305,600, the highest rate of growth in the UK. Greater London and the South East follow with 45% growth in average property prices since 2013.”
“In terms of deposits, whilst Londoners put down the highest deposit in monetary terms, home movers in East Anglia and the South West contribute the largest deposit as a proportion of the average house price. Again, this trend is something we are noticing in the work that we are directly undertaking, with the source of the deposit often being other than just the clients own savings or funds.”
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