For the first time since 2011 the number of home movers has decreased due to the low availability of the ‘right type’ of homes slowing the market.
The latest Lloyds Bank Homemover Report reveals the number of home movers
has reduced by -4% from 367,300 last year to 354,000 in 2016 whereas first time buyer numbers have reached a recent high.
Andrew Mason, Lloyds Bank Mortgages Director, said the fall is despite favourable economic conditions including record low mortgage rates, high employment levels and rising real pay growth.
This was due to the low availability of the ‘right type‘ of homes for those looking to move up the housing ladder may have constrained market activity, said Mr Mason.
This was in contrast to first time buyers
where the numbers reached 335,750 in 2016, the highest level since the 2007 financial crisis.
Home movers 50% lower than a decade ago
Although home mover numbers have increased each year since the recent low in 2009 of 315,000 and is now 12.3% higher, the numbers remain 50.2% below the 712,100 recorded a decade ago.
The following table from Lloyds Bank shows how the annual number of home movers purchasing with a mortgage have changed in the last decade.
||Home mover numbers
|Annual % change
The fall in the number of home movers could be due the recent rise in property values increasing 7% last year to a record high average of £291,777 making the home they want to move to more expensive.
Since falling to £199,645 at the depths of the housing downturn in 2009, the average price has grown steadily by 46% and in London home movers have seen the average price rise by 75% to £560,946.
Mr Mason said, the ability of home movers, 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.
According to the Council of Mortgage Lenders (CML) the number of remortgage buyers
remained the same as last month and buy-to-let landlords
have increased for the first time since the change in stamp duty land tax.
Higher deposits paid by home movers
The rise in house prices also increases the deposit required from home movers to buy a more expensive property which has increased from £72,270 in 2009 to £96,968 in 2016.
The following table from Lloyds Bank shows the average house price and deposit required for different regions in the UK.
||Average house price
|Yorkshire and Humber
In London home movers need an average of £192,432 for a deposit to move to the next rung of the housing ladder, an increase of 74% or extra £82,015 since 2009.
Help for home movers can come from their family as equity release buyers
can access wealth using a lifetime mortgage and give a child or grandchild the deposit on their first home.
The average national deposit of £96,698 is equivalent to 33% of the average price of a typical home mover property, down from 36% in 2009.
Higher prices will have lifted equity levels for many current owners and may explain why more home movers are opting for longer mortgage terms, said Mr Mason.
In the past decade there has been a trend amongst home movers to choose a longer term mortgage with 17% selecting a term of 25 years or more in 2006 increasing to 39% in 2016.
Longer mortgage terms and record low rates have helped keep repayment costs down which are now 38% of home mover disposable income compared to 57% in the summer of 2007.
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.
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.
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 calculator
and property value tracker chart
Use your dashboard to access online mortgage quotes, money off vouchers and start your mortgage application online 24/7 on desktop, tablet or smartphone.