The number of homeowners moving to a new property dropped two per cent to 171,300 in the first six months of 2017, according to Lloyds Bank.
This could harm the property sector by reducing the number of suitable houses entering the market, warns the latest Lloyds Bank Homemover Review published today.
“More people are paying off their mortgages and not moving, with supply at historic low levels there could be a shortage of suitable homes coming on the market and the cost of moving house could be putting people off,” said Andrew Mason, Lloyds Bank mortgage products director.
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As a result, homemovers now make up just 51 per cent of all house purchases financed by a mortgage, compared to 64 per cent a decade ago.
“This has a knock on affect for first time buyers as there will be fewer properties available for them also,” warned Mason.
However, the fall in the number of homemovers is coming from a high base.
The first half of 2016 saw the number of homemovers increase by 18,000, or 11 per cent, compared to the same period the year before. The Lloyd’s report says this increase in activity may have been due to property owners seeking to complete purchases ahead of new stamp duty charges for second and additional homes.
Since April 2016, homeowners seeking to buy an additional property, whether to rent it or use it as second or holiday home, must pay an additional three per cent of stamp duty land tax.
Homemovers tend to pay for pricier properties as well. Over the past five years, the average price paid by this group has grown by 41 per cent from £206,122 in 2012 to £290,991 in June 2017.
In London, the average homemover price has grown even more quickly. It has increased by 56 per cent since June 2012 to £561,032, the highest in the UK.