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Positive House Price Growth Sees Nearly 175,000 Take Second Step on the Housing Ladder

The proportion of home movers in the UK is soaring to a 5-year high, with the rising equity value of homes in recent years helping buyers take a second step onto the property ladder, says Lloyds Bank.

The proportion of home movers in the UK is soaring to a 5-year high, with the rising equity value of homes in recent years helping buyers take a second step onto the property ladder, says Lloyds Bank.

According to research by Lloyds Bank, the proportion of home movers in the first half of 2016 was nearly 175,000 – a level not seen since 2009 and a 9% increase on 2015’s H1. Compared to the period post-2007 financial crisis, the first half of 2016 saw home movers nearly double.


Although this figure remains subdued compared to the previous peak in 2007, where the proportion of home movers reached 327,600, it indicates that affordability for “second stepper homes” has improved.


Lloyds has found that there were 12% more first-time buyers in the market in 2016’s H1 than the first half of 2015 - indicating that second steppers may have found it easier to sell as more potential buyers entered the market.


Furthermore, home movers have been aided by equity values rising rapidly in the last 5 years, unlocking larger deposits for them to put down on their next home purchase. In June, home movers in the UK needed to find a deposit that was, on average, 6.5 times higher than their income – down from 7.3 in 2011.


The rise in home movers has also been attributed to a rise in popularity in long-term mortgages as movers seek to spread the costs of soaring house prices.


The proportion of home movers taking up mortgages lasting 25 to 35 years has, in fact, doubled from 9% in 2011 to 18% in 2016.


Lloyds has also emphasised that although overall affordability for home movers has improved, this is not the case for those wanting to buy in London, where home movers will have to find a deposit 10.9 times higher than their income – up from 9.7 in 2011.


Similarly, those in the South now need to find a deposit 9.4 times higher than their income – up from 8.7 in 2011. By contrast, home movers in Scotland need to find around 5.6 their wages to secure a deposit, while those in Wales need to find a deposit just 6.2 times higher.


Commenting on the findings, Lloyds Bank mortgage product director Andrew Mason said: “A favourable economic backdrop, record low mortgage rates and the Stamp Duty changes have supported the market.


"Higher house prices have also boosted homemover equity levels, which in turn have helped towards the purchase of the next home.


"This improvement is likely to have provided uplift to housing demand among existing homeowners even though wage growth has not kept pace during this period."

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