A recent report on housing, commissioned and delivered by the IMLA, has revealed that on average, homeowners now only move house every 23 years. Getting that property purchase right, is now more important than ever.
This means that only 4.5% of the housing stock of the UK changes hands each year. 30 years ago, 12% of the housing stock changed hands each year, which equated to a property move every 8 years.
The IMLA report suggests that this low housing turnover is driven by a combination of factors. People buying their first homes later; the market having a substantial amount of property held within the private rented sector where turnover is lower; and by the baby boomer ‘hoarding effect’ where middle-aged homeowners are staying put, tying up a large parts of the housing stock.
The IMLA’s analysis also shows the estimated contribution of mortgage finance to the total value of UK housing transactions. Last year, an all time low of 41.7 per cent last year was hit. It means just £4.17 of every £10 spent on house purchases in 2014 was funded by mortgages while cash or equity made up the remainder. The IMLA expects the estimated contribution of cash (including deposits and cash purchases) to housing transactions will exceed 60% for the first time on record by 2016.
Nicholas Thompson of Fairmont Spencer suggests that this increasing move towards equity purchasing will only widen the gap between those on the property ladder, and those seeking to join for the first time. The importance of correctly selecting a new property, more so than ever is vitally important. Figures for making a buying decision on whether to buy a property are just short of one hour, the same time taken when deciding on which car to purchase.
Fairmont Spencer’s property search service is able to assist buyers by offering advice and guidance throughout the purchase process.
For further information please visit http://www.fairmontspencer.co.uk/services/purchase/