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Home mover numbers behind first time buyers for the first time

The number of home movers have dipped to under half of all house purchases and now behind first time buyers for the first time since 1995.

The number of home movers is lower in the first half of 2018 and is only 49% of house purchases using a mortgage down from 62% recorded in 2011, according to the latest research from Lloyds Bank.

Over the past five years the average house price paid by home movers has increased by 35% from £219,479 in 2013 to a record high of £296,936 in 2018.

For the first half of the year there were 170,000 home movers down 1% compared with the same period last year and 33,000 or 16% lower than the second half of 2017.

This coincides with a 3% annual rise in first time buyers to a high of 175,500 which has improved significantly since a low of 72,700 in the first half of 2009.

Lack of suitable homes to buy

Numbers of home movers reached a high in 2017 and the subsequent fall may be fuelled by a shortage of suitable properties for sale and the high price paid for the next home.

The lack of new homes could mean remortgage buyers staying at home and increasing their mortgage to releasing capital which they can use to improve their home.

The following table from Lloyds Bank shows the numbers of home movers and first time buyers for the last ten years for the first half of 2018.
Year Home movers First time buyers
2008 179,800 109,300
2009 117,900 72,700
2010 157,100 95,500
2011 138,300 86,000
2012 152,000 100,600
2013 144,800 115,500
2014 164,500 143,400
2015 156,600 137,000
2016 174,100 157,100
2017 171,700 171,200
2018 170,000 171,200
Average deposits are also higher rising from £76,303 five years ago to £99,592 in 2018 with may second steppers requiring family help to find the extra cash.

With competition from buy-to-let investors and reduced supply of suitable properties, home movers are remaining in their existing home and saving for a bigger deposit.

Home movers in London pay an average price of £566,200 for a new home and put down the largest deposit of £189,167, four times the average homemover deposit of £48,003 in Northern Ireland.

Andrew Mason Lloyds Bank mortgage products director said, despite continuing low mortgage rates, the homemover market has stabilised with little movement in the first half of this year to leave first-time buyers now driving housing activity.

The costs of moving house and potential further interest rate rises may also be weighing on potential homebuyers’ minds says Mr Mason.

More homes now owned outright

In England there are 23.1 million households of which 14.4 million are owner occupiers which has remain unchanged in 2016-17.

The proportion that are owned outright has increased to 34% compared to those with mortgages at 28% partly explained by large numbers of baby boomers reaching early retirement age.

Home movers with mortgages are stabilising, although the bigger picture may be that this is in part because home movers who don’t need a mortgage are on the increase.

In 2006-07 the proportion of those aged 35-44 that were owner occupiers was 72% and this reduced to 52% by 2016-17 in part due to the increase in house prices in the last five years.

For older homeowners there is higher activity with equity release mortgage buyers accessing wealth in their property to consolidate debt, for home improvements or holidays.

Apart from help from family, first time buyers can also use the Help to Buy scheme to purchase a new property and this helps to keep some movement along the property ladder, says Mr Mason.

What are your next steps?

Speak to our LCM mortgage advisers if you are planning to move home, buying your first home, remortgaging your existing home to a new cost effective mortgage deal or are a buy-to-let investor.

Start with a free mortgage quote or call us and we can take your details. Learn more by using the mortgage cost calculators, equity release mortgage calculator and property value tracker chart.

For equity release buyers our London City Mortgage brokers can recommend lifetime mortgages allowing you to receive cash from your property to help maintain your standard of living as costs rise or even pay for care at home.

Use your dashboard to access online mortgage quotes, money off vouchers and start your mortgage application online 24/7 on desktop, tablet or smartphone.

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