Rising house prices have given home movers a higher level of deposit for their next property, reaching £76,398 in 2013, a rise of 6%, according to the latest Lloyds Bank Homemovers Review.
It also shows that home movers in London put down the largest average deposit, at 34% of the average property value, which equates to £144,505. This is close to four times the average deposit put down by home movers in Northern Ireland which at £36,951 is the lowest.
With house prices rising by 7.5% in 2013, home movers are benefitting from more equity and bigger deposits on their next house purchase. The average deposit of £76,398 equates to 33% of the average price paid by home movers for their next property, and the average mortgage advance for a new home mover is £154,150, 41% higher than a decade ago when it was £109,496.
The past year has seen the second successive annual increase in the number of home movers with a rise of 3% from 2012. Two years ago in 2011, there were 315,600 home mover house purchases, 21,900 fewer than in 2013. Whilst this number has been growing in the past two years it is still 55% lower than the annual average between 2003 and 2007 of 750,000.
Since 2008, the average price paid by a home mover has grown by 5% from £220,587 to £230,549 in 2013. Nationally, home mover property prices grew by 12% in the past year.
‘As house prices have increased over the last 12 months, we’re seeing more people look to take the next step on the housing ladder. Higher levels of equity are increasing the average deposits, with this figure now at over £75,000, and this, in turn, is giving home movers more options,’ said Marc Page, Lloyds Bank mortgages director.
‘This year we’ll see Help to Buy enable more home owners to progress to the next rung of the ladder, and as a result we would again expect the number of home movers to increase in 2014,’ he added.
Second steppers are a subset of home movers and refer only to those looking to get on the second rung of the housing ladder. Research shows that first time buyers typically stay in their first home for five years. Those Second Steppers that bought their first home five years ago in 2008, after the peak of the market are now, on average, estimated to have an equity level of £41,286, equivalent to 24% of the average price of a typical second stepper home at £174,240.
The research shows that there is considerable variation in housing affordability between regions, with northern regions more affordable than southern regions for second steppers. This is largely a reflection of the lower prices for second properties in the north.
