In 2016 there were 354,000 homemover transactions, 12% more than the lowest point of the recession in 2009 but 50% less than the 712,000 recorded in 2006.
Homemover activity dropped by 4% in 2016 – the first fall in five years, Lloyds Bank’s Homemover Review has found.
In 2016 there were 354,000 homemover transactions, 12% more than the lowest point of the recession in 2009 but 50% less than the 712,000 recorded in 2006.
Homemovers are opting for longer terms, as 40% chose terms over 25 years in 2016 compared to 17% in 2006.
Andrew Mason, mortgages director at Lloyds Bank, said: “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.”
Homemover house prices rose by 7% in 2016 to £291,777 while deposits are approaching the £100,000 mark at £96,968.
Stephen Smith, director, Legal & General Housing Partnerships, said: “Today’s research from Lloyds Bank highlights the challenges our housing market has faced over the previous year.
"The slowdown in the number of people buying and moving home will likely be the result of a number of wider economic factors, as well as the relentless and unsustainable price rises we’ve seen in properties across the UK.
"However, this well-trodden issue of house prices being inflated as supply struggles to keep pace with demand is not the only problem plaguing the market.
“In this low interest rate environment, other punitive costs associated with moving home are becoming barriers to many buyers. In particular, stamp duty has become prohibitive for people at all stages of their homeownership journey – deterring older buyers from downsizing, as much as it hinders first time buyers trying to get onto the ladder.
“As we await the Government’s Housing White Paper, these figures from Lloyds Bank serve as another reminder of the growing need for action. Long term, more homes need to be built, but in the immediate future policies such as Stamp Duty breaks to incentivise downsizers and aid new buyers will go a long way to improve the fluidity of the market.”
