Stagnant housing market hurting first-time buyers
Lloyds Bank has warned of a ‘stagnant’ housing market, after its Homemover Review found the number of homeowners moving house fell by 2% in the first six months of the year compared to the same period of 2016.
According to Lloyds, there were 171,300 homemovers – current homeowners who move house – in the first half of the year, compared with 174,300 in the same period of 2016.
Lloyds noted that the number of homemovers has grown by 45% since hitting a market low of 117,900 in the first half of 2009, though the current numbers remain at less than half (48%) of what it was before the financial crash in the first half of 2007 (327,600).
Andrew Mason, mortgage products director at Lloyds Bank, said the number of homemovers appears to have “stabilised” in the past year, despite continuing low interest rates and rising employment.
He continued: “There are a number of factors which could be influencing this, more people are paying off their mortgages and not moving, with supply at historic low levels there could be a shortage of suitable homes coming on the market and the cost of moving house could be putting people off.
“This has meant that homemovers now account for just half of today’s housing market compared to a decade ago when it accounted for two-thirds of the market. This has a knock on affect for first-time buyers as there will be fewer properties available for them also.”
Jeremy Duncombe, director of Legal & General Mortgage Club, said the figures highlight the “bottleneck effect” that a lack of suitable and available housing is having on the whole of the housing market.
He added: “The government must address this bottleneck by incentivising fluidity in the market – a reduction in Stamp Duty for first or last-time buyers is a good place to start, but we must not also forget the need for a long-term solution to boost our housing supply and bridge the gap between supply and demand.”
Richard Sexton, director of conveyancing firm e.surv, agreed, noting that if homebuyers feel unable to move up the ladder, it reduces the level of stock available to first-time buyers.
He said: “The government must address our country’s lack of housing supply sooner rather than later, to allow more first-time buyers to step onto the property ladder. This will give a much needed confidence boost to the housing market, give current homeowners the assurance they need to move and ultimately, will keep the housing market fluid.”