The number of people moving up and down the property ladder dipped in the first six months of 2018 to account for 49% of the housing market, according to Lloyds Bank.

For the first time in nearly 25 years, first-time buyers have overtaken the number of people moving home.

There were 170,000 UK homemovers in the first six months of 2018. That’s a 16% drop from the second half of 2017 and a 1% fall compared with the same period last year, according to Lloyds Bank.

The slump in people trading up and down the property ladder this year coincided with a 3% annual rise in the number of first-time buyers to 175,000.

It means that for the first time since 1995, 49% of all house purchases financed by a mortgage were made by homemovers – down from 62% at the beginning of 2011.

Annual number of homemovers (purchasing with a mortgage):

 

Number of homemovers

Annual change

Number of first-time buyers

Annual change

January - June 2008 179,800 -45% 109,300 -40%
Jan - June 2009 117,900 -34% 72,700 -33%
Jan - June 2010 157,100 33% 95,500 31%
Jan - June 2011 138,300 -12% 86,000 -10%
Jan - June 2012 152,000 10% 100,600 17%
Jan - June 2013 144,800 -5% 115,500 15%
Jan - June 2014 164,500 14% 143,400 24%
Jan - June 2015 156,600 -5% 137,000 -4%
Jan - June 2016 174,100 11% 157,100 15%
Jan - June 2017 171,700 -1% 171,200 9%
Jan - June 2018 170,000 -1% 175,000 3%

Why is this happening?

The inactivity among people trading up and down the ladder may be fuelled by both a shortage of suitable properties for sale and the sluggish nature of the broader housing market.

Andrew Mason, mortgage products director at Lloyds Bank, explained: “This [the homemover market stabilising] 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.”

Above: three-bedroom flat for sale in Streatham, south London

What’s the background?

Lloyds Bank’s research revealed that the average price paid by homemovers over the past five years has climbed by 35%, or £77,457, to hit a record high of £296,936.

The highest rate of growth has been in East Anglia, where the typical house price has soared by 46% to £305,612.

Unsurprisingly, the most expensive homes bought by people climbing up and down the property ladder were in Greater London, with average prices standing at £566,200.

In contrast, the least expensive homes for people on the move were in Northern Ireland, where the average price was £170,031.

Coinciding with the growth in house prices, the average deposit put down by a homemover has also increased by 31% in the past five years to £99,592.

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Phil Spencer on Zoopla's Move Planner

Top 3 takeaways

  • First-time buyers have overtaken the number of people moving home 
  • There were 170,000 UK homemovers in the first six months of 2018 - down 1% year-on-year
  • The slump coincides with a 3% annual rise in the number of first-time buyers to 175,000

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