The number of people moved from homes fell by more than a third in the first half of this year, but the total number is still above pre-pandemic levels.
According to Halifax, there was a 133 percent increase in home movers during the tax break, so the number is likely to drop this year.
However, the number of home movers is still high compared to pre-pandemic levels and aside from last year, the start of the year is the busiest for home movers since 2008.
Home prices for movers continue to rise, up 5% in the past year and 42% over the past five years.
The stamp duty holiday ran from July 2020 to September 2021.
Home movers now make up just under half of homebuyers (47 percent), with the remainder representing first-time buyers and landlords.
Last year saw an exceptionally high number of movers due to the government stamp duty holiday that was put in place to support the housing market during the Covid pandemic.
Regionally, Greater London saw the largest decline in engine counts, with the total down 45 per cent compared to the first half of 2021.
According to Halifax, only 13,765 people moved to the Greater London area in the first half of this year.
By contrast, Scotland saw a much smaller decline in engine numbers, at just 13 per cent which was the lowest of any other UK region.
‘There are fewer home movers so far this year than last year’s record: This wasn’t unexpected, and the housing market has remained buoyant in 2022 so far,’ said Andrew Assam, Halifax Homes Manager.
Looking at the five-year trend, however, a different story emerges, with the number of people moving homes in the London area remaining relatively flat.
“With the cost of the median home for operators in London now at £733,628, it is perhaps unsurprising that the market in London will self-correct, with many moving in and around the capital likely to run out of price without additional support.”
Although the numbers are strong, the slowdown remains concerning, said Chris Sykes, technical director at mortgage broker Private Finance.
“Step two is a big step for many. Moving from a typical small first-time buyer home to a larger family home these days seems impossible to some with the costs involved.
For example someone might have bought a £350,000 two-bedroom flat as their first purchase a few years ago, paying a 10 per cent deposit, £2,500 stamp duty with first time buyer discount, a few thousand pounds in legal fees etc. .
Now, they want to buy a 3 Bed Terraced Property valued at £500,000 to start a family. The stamp duty alone for the move would cost £15,000, the sale fee on their existing home a few thousand, and the solicitors costs to buy and sell a few thousand.
They may find that they need a deposit greater than 10 percent depending on their income for their next purchase as well. That’s a lot of money to find for many.
“This could cause a real problem in the long run resulting in a shortage of stock for first time buyer properties.”
While the number of home movers fell over the course of the year, the average house price for home movers increased by 5 per cent to £403,163. Over five years, the average price has seen a sharp jump of 42 percent.
In monetary terms, it means those who buy a home now have an average of £134,108 to put towards their move up the next rung of the ladder. In 2017, that figure was £98,219.
UKwide, the typical deposit is now 33 per cent for all home movers, compared to 20 per cent for first time buyers.
Commenting on the figures, David Hollingworth of L&C said: “The increased requirement for a larger deposit underscores the fact that buyers are competing with higher prices and putting in larger sums as a down payment.
Some of this may be possible as a result of the high sale price of their previous home, but higher prices will naturally put pressure on affordability.
The number of home movers in Greater London is down 45% compared to last year, the largest drop anywhere in the country.
At the same time, increases in the cost of living will be starting to kick in this year and homebuyers will also feel higher rates feeding into the market.
Home movers will likely want to lock in their prices to protect against a further price hike especially since other costs such as energy are currently volatile. They have the option of short to long term fixes depending on how much stability they want to build.
A fix of ten years or more is possible, but borrowers only need to consider any applicable lock-up period and whether that will affect flexibility later on.
Taking a regional look across the UK, Scotland saw the lowest change in house price growth since 2017, at 30 per cent.
London movers have to put in the largest deposits for their new home, averaging out to £248,379 in the capital.
The type of home movers you choose has also changed. Detached and semi-detached homes are the most popular type of home for people to move into, with a 29 per cent and 28 per cent share of the home move market respectively.
Over the past decade, detached homes have grown in popularity, and have seen an increase of seven percentage points.
Best mortgage rates and how to find them
Mortgage rates skyrocketed as the Bank of England’s base rate rose rapidly.
If you are looking to buy your first home, move or remortgage, or are a buy-to-let owner, it is important to get good mortgage advice from a broker who can help you find the best deal.
To help our readers find the best mortgage, This is Money has partnered with an independent, no-fee L&C broker.
The Mortgage Calculator backed by L&C allows you to filter deals to see which ones fit your home value and deposit level.
You can also compare different durations of mortgage rates, from two-year fixes, to five-year fixes and ten-year fixes, displaying monthly and total costs.
Use the tool at the link below to compare the best deals, factoring in fees and prices. You can also start an online application on your own time and save it as you move forward.
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