Number of homemovers falls for first time in five years

The number of people moving home in the UK fell in 2016 for the first time in five years.

The number of homemovers is estimated to have reached 354,000 by Lloyds Bank, down 4 per cent year-on-year. This is the first annual decline since 2011, following four successive years of growth.

Overall, the current number of homemovers has grown by 12 per cent since the lowest point of the recent housing downturn in 2009 – when the number of people moving home was 315,000, the second lowest since records began. However, the current figure is 50 per cent below the level of 712,000 a decade ago.

Andrew Mason, Lloyds Bank Mortgages Director, says: “Despite favourable economic conditions including record low mortgage rates, high employment levels and rising real pay growth, the number of homemovers fell in 2016 for the first time in five years. Whilst higher prices will have lifted equity levels for many current owners, the low availability of the ’right type‘ of homes for those looking to move up the housing ladder may have constrained market activity. Of course, higher prices may explain why more homemovers are opting for longer mortgage terms.

“The ability of homemovers, particularly those in their first homes, to move on is an important component in the housing market as it increases the supply of properties, providing homes for new first-time buyers.”

In 2016 the average house price paid by homemovers increased by 7 per cent from £273,510 in 2015 to a record high of £291,777.

Rising house prices have been a key factor in driving up average homemover deposits to £96,968, an increase of 33 per cent (£23,978) from £72,270 in 2009.

There are four regions (all in southern England) where the average deposit put down by homemovers has gone past the £100,000 mark. In London, homemovers are, on average, putting down £192,432 to move to the next rung of the housing ladder, an increase of 74 per cent (or £82,015) since 2009.

Record low mortgage rates have helped reduce these costs as a proportion of homemovers’ overall outgoings. In Quarter 4 2016, mortgage payments accounted for 38 per cent of homemovers’ disposable earnings – close to the long-term average figure (since 1983) of 40 per cent. This is a substantial improvement since the peak in summer 2007, when average mortgage outgoings accounted for 57% of homemovers’ disposable income.

 

Cost of moving home up by a quarter

22nd September 2016

The cost of moving home in the UK has risen by a quarter in the last decade, reveals surprising new research.

Nationally, the total cost of moving has increased by £2,206 (25 per cent) in the past ten years, according to Lloyds Bank, with the average amount rising by £870 in the last year alone. In 2016, it typically costs £10,996 to move house, says the lender.

This 9 per cent rise year-on-year is well above the 0.5 per cent increase in the consumer price index and annual growth in average earnings of 1.5 per cent. Rising house prices are the main factors behind the increase in moving costs, pushing up estate agency, stamp duty and conveyancing fees, which are all typically linked to the purchase price.

The figure differs widely, however, across regions, which largely reflect local property price trends. Greater London has seen the average cost of moving increase more sharply over the past year – by £4,732 (18 per cent), more than five times the national increase of £870. This is largely down to the fact that Greater London house prices have risen by 14.5 per cent over the past year compared to the UK average of 8.5 per cent.

The average moving cost in London stands at £31,416 – nearly three times the UK average – and the average homemover in the capital pays more than £15,000 in stamp duty and £11,000 in estate agency fees.

Mike Songer, Mortgage Director at Lloyds Bank, comments: “The cost of stepping up the housing ladder has continued to rise sharply over the past year. This trend is especially marked for buyers in London and the South East with the combination of both higher property prices and more rapid increase in prices in recent years resulting in significantly higher moving costs in these parts of the country.”

 

Moving gathers momentum in Scotland, but stalls south of the border

17th February 2016

The number of people moving home gathered momentum in Scotland last year, but stalled south of the border.

The latest Bank of Scotland’s figures show that the introduction of the Scottish Government’s new land and buildings transaction tax (LBTT), which has provided a savings boost for many homemovers, combined with rising house prices, helped increase the number of house moves by 3 per cent in 2015, from 31,8001 in 2014 to an estimated 32,850.

Over the past five years, the average price paid by homemovers has grown by 18 per cent from £170,418 in 2010 to £201,4292 in 2015 – an increase of £31,010, equivalent to a monthly increase of £517. This rise in equity, combined with the new LBTT (replacing the UK Stamp Duty Land Txa) helped to make homeowners more financially mobile.

Under the previous arrangements, the average stamp duty paid by a Scottish homemover was £2,014 (based on an average house price of £201,429). Under the new system, this has fallen to £1,129.

In England, similar conditions put the market in favour of homeowners, with the Stamp Duty change saving an average of £4,530 on purchases, while rising house prices again boosted equity levels.

The number of movers, though, dropped from the previous year.

Figures from Lloyds Bank show that 365,0001 moved house in 2015, slightly behind the 366,400 who moved in 2014. Whilst the 2015 levels are 16 per cent higher than the 2009 market low of 315,800, they are just half of the 2006 peak level of 712,000.

Over the past five years, the average price paid by homemovers has grown by 30 per cent from £210,252 in 2010, to £273,4912 in 2015 – an increase of £63,239, equivalent to a monthly increase of £1,054. This was a marginally faster rise than the increase in average house prices across the whole market (29 per cent).

Andrew Mason, Lloyds Bank mortgages director, says: “The 2015 stamp duty changes, low mortgage rates and rising real pay growth, provided more favourable conditions for homemovers in 2015, although that hasn’t translated to any increase in numbers. We might have expected the change to the stamp duty structure to have resulted in a greater numbers. The ongoing increase in house prices throughout the year will have been especially welcomed by those who bought at the peak of house prices, who have been looking to rebuild their equity in order to make their next move.”

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