The latest economic survey by Lloyds Bank shows that the number of homemovers is at its highest level in 10 years with over 370,300 registered in 2017, the highest since 2007. There are two reasons behind this surge: low mortgage rates and high property demand.
The average homemover house price increased by almost £6,000 compared to the previous year and in the capital, homemovers were putting down deposits well over £100,000 and close to double that.
Only Greater London has seen the number of homeowners decline annually, which is a direct result from the high prices across the city.
Not surprisingly, London’s homemovers have paid an average price of £568,816 in the last year – a jump of 59% in five years.
Despite London’s decline, the South East leads the pack by more than double as the next highest region with the largest number of homemovers last year at 65,400. It’s followed by the South West with 27,500.
The average deposit put down by a homeowner in the last year is £100,387, up 45% over the last five years from £69,089. However, the average deposit price in London is almost double at £196,535.
East Anglia is home to the highest proportional deposit at 37% on a property, followed closely by the South East and the South West at 36%.
An increase in the number of homemovers is a positive sign given the tougher market conditions post-Brexit and this has no doubt been helped by the low barrier of cost where borrowing money is concerned.
While a boost in equity will have also aided many homemovers to take the next step, perhaps the most important change the market has seen, is the increasing number of first-time buyers. This is particularly encouraging when you consider the huge barrier of unaffordability not just where the price of a property is concerned, but also the initial deposit required to secure it.
Over the last year or so, market uncertainty has deterred many from committing to a sale in fear of cashing out too early on their existing asset. It’s this increasing level of first-time buyer demand that has kept the market ticking over as a result of their aspiration to become homeowners, not their desire to profit from their existing home.
Despite benefiting from years of heightened price inflation, London continues to feel the brunt of the market slowdown with those already residing in the capital deciding it is better to stay put then to make a move, in what is currently the worst performing region of the UK.”Russell Quirk