Number of homemovers highest in ten years
In this week's round-up of the mortgage news, consumer journalist Christine Toner looks at cashback offers, moving home and looks at whether Generation Z need to have better financial education.
January 25, 2018
Homemovers at ten year high
Low unemployment and attractive mortgage rates are responsible for a rise in the number of homemovers, accord to Lloyds Bank. The Lloyds Bank Homemover Review has revealed the number of people moving home is at its highest level since 2007. The figure increased by 2% to an estimated 370,300 in the past year.
The report found since hitting a market low of 315,000 in 2009, the number of homemovers has grown by 18% (or 55,300). However, the current number is still 43% below the level of 653,700 seen in 2007.
Andrew Mason, mortgage products director at Lloyds Bank, said: “We’ve seen a slight increase in the number of homemovers following a weak 2016. This could be down to low mortgage rates, rising house prices and high employment levels.
“House price increases will have boosted equity levels for many homeowners, enabling movement along the housing ladder. For the first time, homemovers are choosing to pay an average deposit of over £100,000, with Londoners putting down nearly double this. Taking advantage of increased equity levels by putting down a bigger deposit can really make a big difference towards what homemovers can afford and can be the difference between a good home and the right home.”
The many misconceptions of Generation Z
If you’re worried your financial savviness is not as sharp as it could be, spare a thought for the next generation of first time buyers who are (worryingly) more in the dark than anyone might have guessed.
Yes, according to research by Halifax one in 10 18 to 21-year-olds think Stamp Duty is money to pay for stamps 20% of 11 to 21-year-olds in London think the average house price there is £50,000 – £200,000.
Russell Galley, managing director, Halifax, said: “Despite being one of the most important financial decisions we’re ever likely to make, becoming a homeowner feels like a mystery for Generation Z….”
“Although our research found that the vast majority of 11 to 14 year-olds understand what a mortgage is…. there’s clearly a job for all of us to help kids get a better idea of what’s involved with taking the first step on to the property ladder.”
Paula Higgins, chief executive of Homeowners Alliance, echoed Galley’s concerns.
She said: “These findings illustrate just how important it is for finance to be taught in schools. We’re sending 18 year olds out into the big wide world with a worrying lack of knowledge about a topic that impacts everyone’s lives. These respondents may be young now but if nothing changes for them in the next few years they’re going to be going into their adult life blind to the difficult financial realities of buying a home.”
Help to Buy? Help yourself to some cash
There was good news from Leeds Building Society this month when it announced, as part of a refresh to its Help to Buy range, it would be adding in two new fixed rate deals offering £1,000 cashback on completion.
The £1,000 cashback Help to buy mortgages are priced at 2.04% fixed for two years and 2.34% fixed for five years and are available up to 75% LTV.
Jaedon Green, director of product and distribution at Leeds Building Society, says: “Cashback is always popular with first time buyers as it can help with some of the unexpected costs which inevitably crop up when you step onto the property ladder.
“There was a jump in the proportion of first time buyer activity after the Government introduced stamp duty relief for this group of homebuyers in last November’s Budget. Our mission as a building society is to help people save and have the home they want so we’ll continue to look for ways to innovate so we can help more first time buyers.”
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