New data from AA Financial Services recently revealed that the number of British adults who say they want to move from renting to buying their next home has doubled during the course of 2018, up from 24% to 58%.
This research comes at a time when the government is regularly emphasising its commitment to increasing housing supply (the goal is to build 300,000 new homes a year by the mid-2020s) and getting more people on the property ladder, with the recent Budget once again confirming these ambitions. Chancellor Philip Hammond extended stamp duty relief to first-time buyers of shared ownership homes worth up to £500,000, as well as announcing a £500 million cash injection for the Housing Infrastructure Fund to aid the construction of 650,000 new homes.
What’s more, the government’s Help to Buy equity scheme – which has proved divisive since first being introduced in 2013 – was extended for a further two years so it will now finish in April 2023.
And it seems like the demand is very much there. The latest homebuyer research from the AA suggests that, whilst the proportion of Brits planning to move house has remained largely unchanged (at around 12%) over the last year, the percentage of movers that want to switch from renting to buying their next home has soared.
In addition, the amount of money people plan to spend on their next home has increased, reaching a 12-month high of £332,000 this month. That represents a 9% rise over the last six months and the first significant quarter-on-quarter increase since January 2018.
The research indicates that this increase has been propelled by movers in London and the South East, with planned house spend in the capital growing from £410,840 to £544,957 since the beginning of 2018. Meanwhile, this figure has increased in the South East from £396,571 to £406,478.
In the North East, though, it’s a totally different story, with planned spend falling from £319,490 to £263,264 over the last 12 months. Overall, the figures for planned spend on a new home suggest a widening of the north-south property divide.
The study also looked at where people want to move to in 2019. London and the South East emerged as two of the most popular places to move to for next year – although, having said that, they are also the regions where the fewest people want to stay. Just 48% of London movers, for example, want to stay within the capital, while only 61% of movers in the South East plan to stay local.
The most popular place to put down roots was the South West, which was one of the top regions people want to move to. Once there, people are also much less likely to leave. Some 84% of people moving house in the South West are doing so within the region, the highest number in the UK.
It was a less positive story for the North East and East Anglia, with these being the regions where the fewest people wanted to move. The popularity of the east coast, in fact, has halved over the last 12 months – down from 10% to 5%.
“The economic uncertainty surrounding Brexit has not seriously dampened people’s plans to move home,” David Searle, the AA’s director of financial services, said.
“The simple reason is that, for most people, decisions on when to move are dictated by job change, being closer to family or the needs of children. Unlike many studies that look back at historic data on property transactions, our study looks forward and focuses on the demand for property. Movers are preparing to spend more on buying a home – and it doesn’t end there.”
He added: “With our research suggesting home improvement projects are also on the up, it looks like homeowners are set to borrow £12 billion to do up their homes up in the countdown to Christmas.”