Home mover figures fall for first time in 5 years
For the first time in five years, the number of people moving home has fallen, according to recent research.
The data from Lloyds Bank indicated that in 2016, the estimated number of home movers was 4% lower than 2015 – at 354,000 and 367,000 respectively. Therefore, following four successive years of growth, this is the first annual decline since 2011.
Since the housing downturn in 2009, when the number of home movers was 315,000, the current number of people moving home is up by 12%. This figure is however, 50% below that of a decade ago, where the level was 712,000.
Rising deposits as a result of growing house prices has been cited by Lloyds as a key reason behind the fall.
The average house price paid in 2016 by home movers rose from £273,510 in 2015 to a record high of £291,777 – a growth of 7%.
Across England and Wales, the majority of regions have seen an increase in property value since 2009. The average price for home movers in London has risen by 75%, from £240,977 to £560,946. This is £165,407 more than the South East which is the second most expensive region.
Northern Ireland is the only location where the average price paid by those moving home is below that of 2009, dropping by 3%.
Since 2009, home mover deposits on average have grown by 33% to £96,968 from £72,270, largely due to rising house prices. The average deposit over the past year has risen by £5,640.
This cost as a fraction of outgoings has been reduced due to mortgage rates being at a record low. Mortgage payments in Q4 of 2016 accounted for 38% of disposable income for home movers, a figure just below the long-term average of 40%. Since the peak in 2007, where average mortgage outgoings accounted for 57% of home mover’s disposable earnings, this is a significant reduction.
The data also indicated that over the last ten years, longer mortgage terms have gained popularity with those looking to move home.
83% of home movers in 2006 had a mortgage with a term between 5 and 25 years, with the outstanding 17% being over 25 years. These figures can be compared to those in 2016, which saw 39% of mortgages being for a term between 25 and 35 years. The number of mortgages for terms between five and 25 years dropped to 61%.
Commenting on the statistics was Andrew Mason. The Lloyds Bank Mortgages Director highlighted the reduced availability of appropriate homes in addition to why moving home is important for the whole market.
“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.”