As many as 24% of homeowners plan to move within the next five years and almost 10% are preparing to take their next step on the property ladder next year but face a number of barriers.
According to new research from Lloyds Bank, 22% of homeowners say that the cost of moving is the key blocker for buying their next home
High stamp duty and a lack of the 'right type' of homes are causing the number of people thinking of moving house to fall. The report found that the inability to find the right property within budget (20%), stamp duty costs (19%) and increasing house prices (17%) are all cited as issues that stand in the way of homeowners making that next move. And broader financial pressures may also be constraining market activity, with one in three (32%) stating that they would need a significant pay rise to help make the jump. This is even more pronounced for the younger generation; over half (57%) of 25 to 34 year-olds say they need an income boost.
Aside from financial factors, the whole house moving process is also causing more people to hang on to their properties instead of selling. Two fifths (43%) of homeowners across the UK said that the process of finding a suitable home discouraged them from looking to move. Alongside, dealing with estate agents (25%), being uprooted from their local community (27%) and the uncertain economic outlook (10%) was also blamed.
The research revealed that three in five homeowners (62%) feel that moving house has become more difficult over the past 10 years and a similar proportion (59%) believe that people are now moving less frequently.
Fewer people are moving home and the homemover market is slowing. So far this year there were around 367,000 homemovers, edging down from 371,900 over the same period a year earlier, a fall of 1%. Since hitting a market low of 275,000 in the same 12 month period in 2009, the number of homemovers has grown by 33%. However, the current numbers still remain at just under half (48%) compared to 705,900 seen a decade earlier in 2007.
Andrew Mason, mortgage products director, Lloyds Bank comments: “The combination of the increased cost of moving and a lack of fresh stock coming to the market appears to be making it harder to move and we have seen more homeowners staying put and looking to add value to their homes instead.
Whilst this isn't great news for the housing market where sales have remained flat or fallen over the past few months, encouragingly some homeowners are still motivated and want to move. We may start to see more movement early next year with the stamp duty move helping to increase demand.”
Staying put and making improvements
The biggest reasons motivating homeowners to move are to relocate to a better area (26%) and to buy a bigger property (25%). For families being close to good schools was the key driver (22%) and for those aged over 55 years downsizing is the main motivator (44%).
However, many people are opting to stay put and renovate rather than move. Of the 40% of homeowners not looking to move, three in five (59%) say that they'll make improvements to their home instead.
Three in four not concerned by increase in base rate
The survey also revealed that the majority of homeowners are not concerned (71%) by the Bank of England base rate increase announced in November and eight in 10 (79%) say that the interest rate rise has had no effect on their desire to move home. In addition, 70% stated that a further interest rate rise is likely next year.