19th January 2015
The number of homeowners moving property jumped by 8% in 2014 according to research from Lloyds.
The lender’s latest Homemovers Review found that an estimated 365,400 people moved home last year, as an 8% rise in house prices in 2014 boosted borrowers equity in their current homes making it easier for them to fund a deposit towards the purchase of their next property.
This was the largest annual increase in the number of homemovers since 2010 and was the third successive rise.
The number of homemovers in 2014 was actually 16% higher than in 2009 at the depth of the recent housing market recession.
Despite the pick-up in recent years, the number of homemovers last year was still less than half the all-time high recorded in 2004 at 886,700, and just over half the average during between 2004 and 2007, at 717,025.
First-time buyer numbers have risen significantly quicker than homemovers over the last few years. As a result, homemovers have declined as a proportion of all new mortgage financed home purchasers from 71% in 2004 to 54% in 2014.
The analysis also found that since 2009, the average price paid by a homemover has grown by over a quarter, at 26%, from £199,645 to £252,064 in 2014 – an increase of £52,418, equivalent to a monthly rise of £874. In addition, homemover property prices increased by 9% in 2014 and the average deposit put down was £83,302; 9% higher than in 2013, equating to 33% of the typical price paid of £252,064.
Regionally, homemovers in the capital put down the largest average deposit – £166,265 – 35% of the average property value of £480,416. This is more than four times the average deposit put down by homemovers in Northern Ireland, which was the lowest, at £40,128. Homemovers in the South West put down the largest average deposit in percentage terms, at 36%.
Notably the recent changes to the stamp duty system have saved the average homemover £4,958, reducing the tax bill for the average homemover property of £252,064 from £7,561 to £2,603.
Andy Hulme, Lloyds Bank mortgages director, commented: “House price rises over the past 12 months have enabled more homeowners to make the next move on the housing ladder. The resulting higher levels of equity in their property are providing homeowners with more funds to finance the purchase of their next home.
“A steady rise in property values in 2015 should further ease the constraint on many of those who bought their first home around the peak of the market in 2006 and 2007, enabling more of them to become second steppers.”