First-time buyers have overtaken homemovers in the market for the first time since 1995, according to figures released today (20 July).
The latest Lloyds Bank Homemover Review showed there were 170,000 homemovers in the first half of 2018, a fall of 1 per cent from the same period last year and down by 16 per cent from the second half of 2017.
Homemovers now account for 49 per cent of the housing market, a drop Lloyds attributes to a possible shortage of suitable houses for sale but was in keeping with the broader trajectory of the housing market trajectory.
Andrew Mason, mortgage products director at Lloyds Bank, said despite continuing low mortgage rates, the homemover market has stabilised with first-time buyers now driving housing activity.
He said: "This 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."
He added it was good to see the number of first-time buyers increasing and helping to keep some movement along the property ladder.
The drop in homemover activity follows a 10-year high in 2017, but there has been a significant fall since the first half of 2011, when movers comprised 62 per cent of all house purchases financed by a mortgage.
The fall is in contrast to a 3 per cent rise in first-time buyers, of which there were 175,500 in the first half of 2018.
Craig Hall, new build manager at Legal & General Mortgage Club, said while it is good to see a rise in the number of first-time buyers getting on the property ladder, homemovers tend to keep the cycle turning.
He said: "If these numbers continue to decline this could create a bottleneck in the market.
"The stagnation we are seeing can be partially attributed to the lack of incentives for homemoving, which is prompting many to ‘improve not move’. Stamp duty, legal and estate agent fees all add up; and a lack of suitable housing for those looking to downsize is also an issue."
Mr Hall said the industry needs to work together to stimulate fluidity in the housing ladder.
He said: "There has been a helping hand for first-time buyers with help to buy, and maybe it is time we start to focus on solutions for those further up the ladder as well."
While the number of homemovers dropped, the average price paid by the group hit a record high of £296,936 in 2018 - a growth of 35 per cent from £219,479 in 2013.
Homemover house prices showed regional disparities, with Greater London topping the scale with an average of £566,200 compared to the cheapest in Northern Ireland with an average price of £170,031.
Homeowner deposits have also increased since 2013, with a growth of 31 per cent to reach an average of £99,592 in 2018 compared to £76,303 five years ago.