House prices are up but sales are still sluggish
08-11-2015
Half as many Britons moved house so far this year as moved in the first half of 2009
Rightmove axes 20pc of staff
Despite the boom in prices, the number of housing transactions remains at relatively low levels Photo: PA
By Tim Wallace
House prices may be booming, but sales levels are stuck in the doldrums, according to new figures from Lloyds Bank.
The bank estimates that 155,000 Britons moved huse in the first half of the year, down from 171,700 in the same period of 2014 and less than half the 327,600 who moved when the market peaked in the first six months of 2007.
First-time buyer numbers are also relatively low at 135,000 from January to the end of June this year. That is down 10pc on the same period of 2014 and compared with the first-time buyer peak of 190,900 in 2006.
There is still strong demand in the market - house prices rose 6pc over the past year to a UK average of £261,524 for those moving house. And prices are up 31pc over the past decade, as the average home cost £200,228 back in 2005.
The growing cost of moving home is one factor, Halifax analysts believe. As prices rise, more and more home buyers are pulled into paying stamp duty, a tax levied on the sale of properties worth over £125,000.
The tax costs buyers 2pc of the value of the home aove £125,000, and increases as the property becomes more valuable, up to a maximum of 12pc on prices above £1.5m.
This acts as a disincentive to move frequently, and even though the Chancellor reduced the burden on average-priced homes in the Autumn Statement ;ast year, the trend towards higher prices has hit buyers hard.
"The proportion of homemovers paying stamp duty nationally stands at 83pc in 2015 compared with 76pc in 2005, varying regionally from 100pc in London to 66pc in the North," said Halifax. "Significantly higher proportions of homeowners in southern England pay stamp duty at the higher marginal rates with 89pc of homemovers in the capital and 61pc in the South East paying more than £250,000 for their property."
A shortage of supply has also helped to drive up prices, as the population rises more quickly than houses are built and inward migration to areas like London means there are particular pressure points in parts of the country with low building levels.
“Whilst the number of homemovers has risen significantly since 2009, it remains well below previous levels and has recovered less strongly than first-time buyer numbers," said Lloyds Bank's mortgage director Andrew Mason.
"This is likely to partly reflect the high costs associated with moving home, as well as highlighting the difficulties that homeowners can face in finding somewhere suitable to move to due to the shortage of properties available for sale.”