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First-time buyers surpass the number of people moving house in 2018

For the first time since 1995, the number of first-time buyers has exceeded the number of people moving home; with homemovers now accounting for 49% of the housing market.

The latest Lloyds Bank Homeowner Review revealed that there were 170,000 UK homemovers during the first half of 2018, a drop of 1,700 (1%) on the same period last year, and down by 33,000 (16%) in comparison with the final six months of 2017. The number of first-time buyers for the same six months of 2018 came in at 175,500.

This stall in the homemover market was also prevalent in Scotland according to the Bank of Scotland’s Homemover Review. With only 15,300 homemovers in Scotland, there was a drop of 900 against the same period last year, and down by 3,100 compared to the final six months of 2017. The number of first-time buyers in Scotland for the first half of 2018 measured in at 16,256.

Lloyds Bank mortgage products director, Andrew Mason, explained that despite continued low mortgage rates, the current homemover market has stabilised, with housing activity being driven by first-time buyers. Mason believes this has occurred in part due to the Help-to-Buy scheme facilitating first-time buyers in purchasing a property, alongside a shortage of suitable properties for those homeowners looking to climb the housing ladder.

Bank of Scotland mortgage director Graham Blair also pointed to the low availability of the ‘right type’ of homes as a factor towards the constrained market activity, combined with rising house prices and deposits.

Record level house prices and deposits

The average price paid by homemovers in Scotland has grown by 21% over a period of five years, from £172,881 in 2013, up to £209,496 in 2018. However, this is still well below the UK average purchase price, which has seen a growth of 35% over the same period, from £219,479 in 2013, up to £296,935 in 2018; a record high.

The average deposit required from a homemover in Scotland also increased by 23% over the past five years, from £53,205 in 2013, up to £65,353 in 2018. Again, this is also a considerably lower increase than seen across the UK for the same period.

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