The number of people moving home has fallen for the first time in five years, figures from Lloyds Bank show.
There were an estimated 354,000 home movers in 2016 – down 4 per cent from 2015 when homemover numbers totalled 367,300. This is the first annual decline since 2011, following four successive years of growth.
Overall, the current number of homemovers has grown by 12 per cent since the lowest point of the recent housing downturn in 2009 – when the number of people moving home was 315,000. However, the current figure is 50 per cent below the level of 712,000 a decade ago.
In 2016 the average house price paid by homemovers increased by 7 per cent, from £273,510 in 2015, to a record high of £291,777. Since falling to £199,645 at the depths of the housing downturn in 2009, the average price has grown steadily by 46 per cent (or £92,000).
The average national deposit of £96,698 is equivalent to 33 per cent of the average price of a typical homemover property, down from 36 per cent in 2009. The current percentage is unchanged compared to a decade earlier; in cash terms, the average deposit in 2006 was £81,921 – £14,777 lower than in 2016.
Over the past decade there has been a trend amongst homemovers to choose a longer mortgage term, which extends beyond the traditional 25 years.
In 2006, 83 per cent of homemovers had a mortgage term of between five and 25 years, whilst the remaining 17 per cent were for over 25 years. In 2016, 39 per cent of mortgages were for a term of between 25 and 35 years, while the number of mortgages for terms of five years up to 25 years fell to 61 per cent.
In Quarter 4 2016, mortgage payments accounted for 38 per cent homemovers’ disposable earnings – close to the long-term average figure (since 1983) of 40 per cent. This is a substantial improvement since the peak in summer 2007, when average mortgage outgoings accounted for 57 per cent of homemovers’ disposable income.
Lloyds mortgages director Andrew Mason says: “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.”