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For the first time since 1995, the number of first-time buyers has outstripped the number of homeowners looking to move, with the latter now making up a lesser 49% of the market compared to the dominating 62% seen in 2011. This is according to the latest Lloyds Bank Homemover Review, which furthermore recorded a fall in the number of people moving home.
Having recorded the highest level of homemovers in 10 years last year, there was perhaps understandably a fall in the first half of 2018, with 170,000 marking a 1% reduction on the first half of 2017 and a 16% drop from the second half of last year. This may well be fuelled by a shortage of suitable properties to move to, although first-time buyers seem to be having less trouble as there was a 3% year-on-year rise in this section of the market.
What may be putting some homemovers off is the record high average price attached to moving to a new home, with the overall UK average standing at £296,936 when looking at the first six months of this year. This is 3% higher than last year, but a whopping 35% increase over the last five years.
At the same time, the average deposit has also increased by 31% over the past five years, sitting at £99,592 – quite the investment considering the dearth of suitable housing supply. Unsurprisingly, the average deposit paid by those in London was higher still – at £189,167 the highest in the country – although the largest increase over the last five years has been seen in East Anglia (48%).
"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," said Andrew Mason, mortgage products director at Lloyds Bank. "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."
The potential for mortgage rate rises in the near future shouldn't stop those looking to move home now from comparing the market in search for their ideal Best Buy mortgage product. At the same time, those who can't find a suitable home to move to may want to consider remortgaging before rates increase.
First-time buyers who don't yet have a Help to Buy ISA could look into their benefits, and don't forget to compare them with the newer Lifetime ISA either. If you've already got your deposit ready to go, there's the first-time buyer chart for those with a 5% deposit or the general mortgage search for those with a bigger first deposit.
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