First-Time Buyers Outnumber Homemovers For First Time Since 1995
3 minute read
According to the latest Lloyds Bank Homemover Review, the first six months of 2018 saw the proportion of people moving home drop below the number of first-time buyers for the first time since 1995. The first half of the year saw 170,000 people moving home – a reduction of 1% compared to the same period last year, and a substantial 16% reduction from the second half of 2017. Overall, homemovers accounted for 49% of the total housing market.
Nationwide, the average house price paid by homemovers was £296,936, which represented an increase of 35% from 2013’s average of £219,479. Prices and price changes continue to vary considerably by geographical region. The highest rate of growth was in East Anglia, where homemover house prices have risen by 46% since 2013, to £305,612. Greater London was not far behind, with a 45% increase in prices to an average of £566,200 – the most expensive of all regions. The area of the UK with the least expensive homemover homes was Northern Ireland, with an average price of £170,031.
The drop in the proportion of homemover house purchases in relation to the overall market can be attributed to a variety of factors, including a shortage of suitable properties for sale, and a more muted broader housing market. Although the 16% drop in homemovers from the second half of 2017 to the first half of 2018 is marked, this is in the context of last year’s substantial rise in the number of homemovers – 2017 saw the highest level in ten years. The relative drop in homemovers also coincided with a 3% rise in the number of first-time buyers.
Lloyds’ report also revealed that the percentage of all UK households that were owner-occupiers remained unchanged in 2016/17, at 14.4 million (63%). However, the figures did show that the composition of owner-occupiers has changed, with a larger proportion of households now outright owners (34%) as opposed to mortgage holders (28%). This is at least partly because of the large number of baby boomers who are now reaching early retirement age. The proportion of 35-44 year-olds who are owner-occupiers dropped to 52% in 2016/17, compared to 72% a decade previously. Correspondingly, an increasing number of people in this age group are in the private rented sector – growing from 11% to 29% in the past decade.
Andrew Mason, mortgage products director at Lloyds Bank, 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. 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. The costs of moving house and potential further interest rate rises may also be weighing on potential homebuyers’ minds. However, it is good to see the number of first-time buyers increasing, helping to keep some movement along the property ladder.”
At Just Mortgage Brokers we have years of experience in helping homebuyers of all categories find the lender and mortgage that’s right for them. Whether you are a homemover or a first-time buyer, contact us today on 0808 250 3094, or use our online contact form, to discuss how we can help you buy a new home.