Lloyds Banking Group has reported that the number of homeowners moving to a new property was lower in 2016 than in 2015 – the first time it has fallen in five years.
Last year, a total of 354,000 people sold their current house and bought a moved to a new one – down 4% compared to 2015. Part of this drop is thought to be down to increasing house prices, with the nationwide average price paid by those who did move reaching a record high of £291,777.
As Lloyds’ mortgage director, Andrew Mason, explained, rising prices do go some way towards incentivising homeowners to sell, since their available equity is increased. However, high prices naturally have the adverse affect of deterring buyers – particularly first time buyers, but also home movers who may struggle to find the kind of property they want within their price range.
Mason said: “Despite favourable economic conditions including record low mortgage rates, high employment levels and rising real pay growth, the number of home movers 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 home movers are opting for longer mortgage terms.”
Stagnant figures for home movers also spells bad news for first time buyers insofar as it means that there is simply less stock for them to choose from.
Slow sales caused some estate agents to voice concern about their profits and activity last year. For example, Foxtons’ profits fell by 42% in July, something that they blamed squarely on pre-referendum uncertainty.