According to recent data collected from the IMLA (The Intermediary Mortgage Lenders Association), UK homeowners are moving house 50% less often than they did 30 years ago!
Moving home was historically a fairly regular occurrence with homeowners moving on average, every 7.4 years. However, now the market is barely moving with homeowners choosing to stay put for almost 20 years!
In stark comparison, first-time buyer statistics are on the rise, largely as a result of the introduction of various government initiatives like the Help to Buy Scheme and the scrapping of stamp duty. The focus has very much been on getting individuals onto the property ladder. However, this appears to be having a direct impact on the rest of the market.
It has been suggested that the potential reasons for this change in behaviour, could be due to a number of factors, including:
- Significantly increased and sky high house prices – on average house prices have increased by a staggering 7% per year since 1980!
- Older generations remaining in larger properties – this is due to a lack of suitable properties (e.g. bungalows) being available, making downsizing less of a viable option.
- More stringent rules on mortgage applications – these changes have been mainly due to mortgage debt historically being deemed high risk in terms of financial stability.
The fact is, in recent years spending habits have changed and it is becoming increasingly difficult to keep up with the everyday financial demands, seemingly moving from a ‘save for a rainy day’ mentality to a ‘spend it while you’ve got it’ approach!
It would appear that instead of moving home, more people are opting for home improvements. Figures show that a large proportion of homeowners are choosing to extend their existing properties to accommodate their growing families and revamping them to increase the sale price in the future.
With one in four people still living at home between the age of 20-34 and the considerable saving opportunities of extensions and loft or garage conversions, it can be easy to see why this would be the preferred option for many.
What Needs to Happen?
The support has understandably been targeted at the younger generation, ensuring they get the opportunity of home ownership, yet might this be to the detriment of other areas of growing concern?
So what is the answer to improving housing turnover? What actually needs to happen to readdress the balance and increase stability in the UK’s increasingly fragile housing market?
Perhaps a big picture approach is necessary to ensure the whole market is taken into consideration. Maybe decision making needs to become more holistic with a collaborative approach that is inclusive of all involved – from planners to developers and lenders, and importantly the nations requirements as a whole.
Ultimately, the answer can really only be found in the reassessment of current policies and changes at policy level, as well as improved support from lenders.
Only time will tell…