Movement among homeowners has been in decline for almost three decades. Despite many more homes in private hands, buying and selling activity has halved over that time.
The scale and significance of this long-term decline in homeowner movement was analysed in a report from UK Finance.
This pointed out that there were around 1.6m home sales in the UK pre-recession. This figure fell to 860,000 in 2009 but had recovered to 1.2m by 2014. The result of this was 400,000 fewer transactions each year, with the majority of those being mortgaged-movers.
The research suggested that missing movers account for around 320,000 of the annual housing transaction shortfall.
Three factors were said to determine the moving rate among this group:
- their desire to move;
- sufficient funds;
- the availability of a home they want to buy.
Of these factors, the availability of sufficient funds – specifically, sufficient equity – was suggested to be the dominant factor holding back the mortgaged mover rate.
Any single or combination of these factors can certainly put a halt to the aspirations of homeowners to trade up.
Shifting priorities and circumstances of first-time owners can result in a tricky balancing act when it comes to timing, expense and availability when plotting their next property move.
Stock levels remain low and house prices continue to rise faster than wages. In addition, next-time buyers are not only facing challenges around purchasing but also how best to proceed with their current property. Should they sell or let-to-buy?
Pre-recession we saw a marked rise in prominence of let-to-buy. As equity levels grew this became an increasingly viable option for many, even for those with no previous aspirations to be a landlord.
However, while this can still prove to be a valid option, stamp duty and tax changes now mean this needs even greater consideration and expert advice.
Inevitably there will always be multiple driving forces behind any potential move up or down the property ladder.
Arguably the need for extra space is the most pressing for many growing families. Which leads to the question – is it best to move or improve?
Borrowers need to be fully aware of the costs attached to extending their current property compared to moving expenses, stamp duty costs and other monetary considerations.
And there is mounting evidence that improving, rather than moving, appears to be winning this particular race, a factor which could further impact mortgaged-mover numbers.
Ending on a positive note, multiple options are available to next-time buyers. Borrowing costs remain low and availability high as competition continues to generate some great deals for both purchase and remortgage purposes.
The weighing-up of influencing factors behind any move, or decision to improve, will always have to come from the borrower.
So, let’s shine the spotlight on next-time buyers. After all, if we can’t find ways to match their needs, where are first-time buyers going to go next?