Home owners moving up property ladder reach three-year high

THE NUMBER of people estimated to have moved up the housing ladder in 2013 reached a three-year high as rising house prices boosted the amount of cash they had tied up in their existing property.

Around 337,500 existing home owners with a mortgage moved house last year in the UK, marking a three per cent increase on 2012 and the highest annual total since 2010, according to Lloyds Bank’s home movers review.

The figures also showed that the average deposit put down by existing home owners buying new homes in Yorkshire was £53,453, – which worked out at 32 per cent of the average purchase price.

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Only the North East had a lower average deposit in England where the figure was £46,602. In Northern Ireland the figure was £36,951.

On average, existing home owners are now putting down a deposit of £76,398 on the property they are buying, which is a six per cent increase on a year earlier and equates to around one-third of the purchase price of the home they are moving into.

Home movers in London, where house prices have been surging ahead of the rest of the country, typically put down a deposit of almost double the national average last year, at £144,505.

Lloyds’ report pointed to rising house prices as helping to increase existing home owners’ equity levels and help free them up to climb onto another rung of the property ladder.

A recent report from Lloyds’ sister bank Halifax found that house prices increased by 7.5 per cent across the country over 2013 to reach £173,467 on average and a similar rise is predicted for this year.

One group of home owners who have particularly struggled to move in the years since the financial downturn are people trying to take their second step on the housing ladder.

But the Lloyds report showed how the situation is improving for this group, many of whom had bought their first property with only a small deposit and then found themselves stuck in their “starter” home with little or no equity as the financial downturn took hold.

Lloyds found that second steppers are now estimated to have an average equity level of £41,286 – equivalent to almost one quarter (24 per cent) of the price of the average second stepper home.