Just 6% ofBritish adults plannedto movehouse 48 hoursafterlast week’s interest rate rise, AA Financial Services has found.
Just 6% ofBritish adults plannedto movehouse 48 hoursafterlast week’s interest rate rise, AA Financial Services has found.
The proportion has beenconsistent throughout 2018 at 8%.
The AA suggested that rising interest rates will dampen consumer appetite for moving home, owing to concerns mortgages will start to become more expensive for homeowners.
David Searl, managing director at AA Financial Services, said: “Whilst many look at house prices, we are interested in looking at people’s plans to move in the future, what drives the decisions on when and where to move.
“Our July data painted a positive picture for August and September and following the rate rise we wanted to get a sense on whether external events such as these shaped people’s thinking and plans. On the evidence of what we have seen it looks like there was an immediate impact.
“Whether this is a short-term reaction or not is too early to tell, but we would expect to see more people reacting to uncertainty by putting plans on hold.
“The key issue for many now is not so much house price trends but the cost of borrowing. It is now a time for those moving home to shop around for a mortgage deal that works for them and is sustainable in the longer term.”
AAsaidin July there was a a rise in proportion of people planning to move home inthevery short term (three months) before September.
It also found the average planned spend on a new home up to an average of £320,736 (from £312,702 in April), a swing from renting to buying as movers head south and 20% of under 25s planning to buy their next home – up from 13%.
Searleadded: “After years of record low interest rates, last week’s rise - and indications that more is yet to come – mean that the cost of buying a home is going to get more expensive.
“Given many people are moving home to save money, release equity or to make their money go a bit further it seems that, for some, the reality of living with rate rises may well temper their plans to move in the short term.
“We saw many positive signs emerging from our research in July, promise of a house moving high for late summer, which the rate rise seems to have dampened.”
Overall in July 2018, 22% of adults said they were considering moving house in the next two years. Those planning a move within the next three-months had risen to 5%,with those planning a move in the next six month unchanged at 8%.
Two days after last week’s interest rate rise, the figures fell to 4% planning a move in three months and 6% in six months.
Despite concerns over property supply, in July there was a significant swing among renters planning to buy their next house. Overall, 34% of renters said they plan to buy their next home – up from 28% in the spring.
Set against reports that UK house prices are rising at the slowest rate since March 2013, there was a rise in target buy price that movers had available in July – an average of £320,736, up from £312,702 in April.
People in the Midlands planning a move, within the region or further afield, were proportionately most likely to have £1m or more budgeted for purchasing their next home (4%),while the national average was 2%.
People in Scotland looked set to have the smallest mortgages as they planned to spend the least to secure their next home – an average of £204,714.
People in London (7%) and the East Midlands (7%) were most likely to be planning a move in the nextthreemonths. Regions where people were most likely to be imminently planning a move in the spring – Yorkshire, the North West and the East–saw a slight fall, whilst moving plans rose in the other regions.
