Take, for instance, research from Savills which revealed that:
- before 2008 homeowners moved on average 3.6 times after buying their first home, and;
- that figure is now only likely to be 1.8 times over their lifetimes.
In other words, people are moving far less than they did just a decade ago.
The reasons for this are numerous and take in all manner of inter-related reasons.
These include lack of supply, subsequent house price increases, stamp duty changes and increases, a lack of focus on existing homeowners and their needs, poor wage inflation, Brexit, and everything in between.
The fact is, this is a major problem.
To start, I can’t quite fathom that politicians and policy-makers would have wanted to genetically engineer a housing market where people are forced to stay put, or one where property transactions continued to drop and drop.
We hear much about the benefits of social mobility and what it offers the UK economy.
However, this is being severely hampered by small-scale tinkering and wholesale interventions that have a real, tangible and material impact on our housing market.
All eggs in one basket
At present, we have a stamp duty system which has been manipulated into a position where the tax take has increased but we’re all acutely aware that, as transactions continue to fall, this will soon move in the other direction.
What happens then? Million-pound-plus transactions have dropped off a cliff, and the impact is being felt at all price points above first-time buyer level.
The Spring Statement seemed to cut short the traditional calls for stamp duty changes, but that need still exists.
At the moment it appears the government is putting all its eggs in the first-time buyer basket, offering full cuts to stamp duty for properties below £300k.
But does this bring in new first-timers or simply help those who were going to buy anyway? Aren’t we missing the point about the lack of purchases further up the ladder?
Can success be proved?
From a buy-to-let perspective, the 3% increase in stamp duty might appear to have done its job in that homes have moved from the private rental sector into home-ownership and amateur landlording is now far more difficult.
But again, how does this help the housing market in terms of filling the housing gap?
‘First time buyers will buy those homes,’ runs the argument but can this truly be proved?
Increased first-time buyer numbers seem to be a result of an increase in new-build supply and the success of the Help to Buy scheme which is purely a new-build scheme.
What about second-hand property stock, and what about making it more affordable for people to move up the ladder?
At present, when you have to stump up thousands of pounds of dead stamp duty money, it’s perhaps not surprising that more people are staying put and looking to extend.
Numbers tell a different story
It’s not just homeowners themselves who suffer, but the entire market and all stakeholders – the impact on UK plc and our economy can’t be underestimated.
Thousands upon thousands of livelihoods depend upon housing transactions not just maintaining their current levels but rising. A fall hurts us all.
So, when the chancellor looks at the market again for his November Budget, I hope there will be an understanding of our current predicament.
People want to move, landlords want to buy, and lenders are willing to lend, however the market has been shifted into a position where all of the above is increasingly difficult.
The numbers may well tell a very different story to the success the government is currently spinning and let’s hope action can be taken, before we make the situation even worse.