- The number of homemovers has risen by a third compared with 2009 at the bottom of the market, but is still less than half the total in the first half of 2007.
- The average deposit put down by a homemover is now almost £90,000 and in London rises to over £175,000.
- Recent Stamp Duty changes save average UK homemovers £4,769.
An estimated 155,000 people moved home in the first six months of 20151, according to the latest Lloyds Bank Homemovers Review. The number of homemovers in the first six months of 2015 was 9% lower than in the same period in 2014.
Despite this decline, the number of homemovers in the first half of 2015 was almost a third (32%) higher than in the same period in 2009 at the depth of the housing market recession. The rise in house prices over the past few years has boosted homeowners’ equity in their current homes making it easier for them to fund a deposit towards the purchase of their next property.
Notwithstanding the improvement since 2009, the number of homemovers in the first half of this year was less than half the total in the first six months of 2007 (327,600). [Table 1]
Homemovers in decline as a proportion of all buyers
The percentage decline in the number of homemovers between the first halves of 2014 and 2015 was closely in line with the 10% fall in first-time buyers. First-time buyer numbers have, however, risen significantly more quickly than homemovers over the last few years. As a result, homemovers have declined as a proportion of all new mortgage financed home purchasers from 72% in 2004 to 54% in 2015.
Andrew Mason, Lloyds Bank mortgages director, commented:
“There was a modest decline in the number of homemovers in the first half of the year compared with 2014, which was in line with the general softening in housing market activity.
“Whilst the number of homemovers has risen significantly since 2009, it remains well below previous levels and has recovered less strongly than first-time buyer numbers. This is likely to partly reflect the high costs associated with moving home, as well as highlighting the difficulties that homeowners can face in finding somewhere suitable to move to due to the shortage of properties available for sale.”
Prices and Deposits
The average price paid by a homemover has grown by a quarter (25%2) over the past five years from £208,654 in 2010 to £261,524 in 2015 – an increase of £52,869, equivalent to a monthly rise of £881. Homemover property prices have increased by 6%over the past year. [Table 2]
The average deposit put down by a homemover in 2015 was £87,954; 8% higher than in 2014 (£81,549). This equates to 34% of the average price paid by homemovers of £261,524. [Table 3]
Regionally, homemovers in the capital put down the largest average deposit - £175,273 - 36% of the average property value of £492,882. This is more than four times the average deposit put down by homemovers in Northern Ireland (£43,625 – the lowest). Homemovers in East Anglia (37%) and the South West (36%) put down the largest average deposit in percentage terms. [Table 3]
Nationally, the recent changes to the Stamp Duty system have saved the average homemover £4,769, reducing the tax bill for someone buying the average priced homemover property of £261,524 from £7,845 to £3,076. Savings for the average homemover in London, however, are considerably smaller than this with a reduction in the Stamp Duty bill for the average homemover property in the capital (of £492,882) of only £142 from £14,786 to £14,644.
The proportion of homemovers paying Stamp Duty nationally stands at 83% in 2015 (compared with 76% in 2005), varying regionally from 100% in London to 66% in the North. Significantly higher proportions of homeowners in southern England pay Stamp Duty at the higher marginal rates with 89% of homemovers in the capital and 61% in the South East paying more than £250,000 for their property. [Table 4]
The average age of a homemover is 39 years old; down from 41 in 2005. This fall may be due to a reduction in the number of total home moves being made over a lifetime with fewer people over 40 now moving. [Table 5]
Nationally, homemover purchases are fairly evenly split between three main property types: semi-detached (30%), detached (27%) and terraced homes (25%). This is in stark contrast to first-time buyers who buy far fewer detached properties (8%) and a lot more flats (23% against 10% of homemover purchases).
The homemover market in London is very different to anywhere else in the UK with a far higher proportion buying flats (32% against the national average of 10%) and a much smaller proportion of detached homes (8% against 27% nationally). [Table 6]