Zoopla Property : Number of people moving home drops for the first time in 5 years

What's the latest?

The number of homemovers has fallen for the first time in five years as people trading up the ladder struggle to find a suitable property.

An estimated 354,000 existing homeowners bought a new property in 2016, which is 4% fewer than in 2015 and the first annual fall since 2011, according to Lloyds Bank.

Despite the dip, homemover numbers remained around 12% higher than the low point reached in 2009.

However, they were still less than half the 700,000-plus people who traded up or down the property ladder a decade earlier in 2006.

Why is this happening?

The fall in homemover numbers is likely to be due to the current shortage of homes on the market.

The Royal Institution of Chartered Surveyors (RICS) recently reported that the number of properties for sale remained at a record low for most of 2016.

Andrew Mason, Lloyds Bank mortgages director, said: '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.'

Who does it affect?

The shortage of suitable properties for sale is not just bad news for existing homeowners wanting to move, but it impacts whole property market.

First-time buyers need existing homeowners to trade up the property ladder to make starter properties available for them to buy.

At the same time, the current mismatch between supply and demand is one of the key factors that is pushing house prices higher, leading to affordability becoming increasingly stretched.

Sounds interesting. What's the background?

Prices paid by existing homeowners moving property rose by 7% in 2016 to average £291,777.

House price growth helped to boost the amount of equity people had in their homes, with the average deposit put down by movers rising to nearly £100,000 or a third of their new home's value.

But, potential evidence that those already on the ladder could be struggling with affordability issues, 39% of homemovers opted for a mortgage term of longer than the standard 25 years.

By contrast, in 2006, around 83% of homemovers had a mortgage term of between five and 25 years.

House prices paid by homemovers rose in all areas of the UK in 2016.

East Anglia saw the strongest growth at 12%, followed by Greater London and the south east at 9%.

But at the other end of the scale, prices paid by those trading up the ladder edged ahead by just 1% in Scotland and only 2% in the north.

Homemovers paid the most for a property in Greater London at an average of £560,946, while these movers also had the biggest deposits at an average of £192,000.

Top 3 takeaways

• The number of homemovers has fallen for the first time in 5 years as people trading up the ladder struggle to find a suitable property.

• An estimated 354,000 existing homeowners bought a new property in 2016, 4% fewer than in 2015 and the first annual fall since 2011.

• Homemover numbers were 12% higher than the low point reached in 2009, but less than half the more than 700,000 people who traded up or down the property ladder in 2006.

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