Average home owners only move house once every 23 years.
- May 20, 2015
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The Intermediary Mortgage Lenders Association has produced a report called The New Normal: One year On. It’s suggesting that that the annual turnover of the private housing standard has decreased from just above 12% to only 4.5 % during the last three decades. As a result, the IMLA’s analysis identifies the ‘average’ family home currently changes hands once every 23 years compared to the 1980s where home owners would move approximately every eight years. The changing face of the UK’s housing market has led to the average turnover of a property almost trebling.
The IMLA report argues that low housing turnover is a product of people buying their first homes later; larger private rented sector where the turnover is lower and by the ‘hoarding effect’ where middle-aged homeowners are staying in their homes and tying up a large part of the housing stock.
These factors are likely to keep the turnover down for the foreseeable future, which is potentially limiting mortgage lending and confining access to present properties.
IMLA’s analysis also highlights the estimated contribution of mortgage finance to the total value of UK housing transactions hit an all-time low of 41.7% in 2014. It means that just £4.17 of every £10 spent on house purchases in 2014 was funded by mortgages while cash or equity made up £5.83. The IMLA are expecting the estimated contribution of cash (including deposits and cash purchases) to housing transactions will surpass 60% by 2016 which wold be the first time on record.
The executive director for IMLA Peter Williams says “In the absence of a sustained rise in housebuilding and improved affordability and turnover, the fact that properties are coming onto the market less frequently severely limits the scope for would-be first time buyers to graduate to owning their own homes”
“Inertia in the property market spells danger for future owner-occupation levels, and the growing influence of cash and equity is sowing the seeds of a permanent social divide”.