'Broken' housing market sees 7.5 million locked out of homeownership

Warren Lewis
11th June 2018
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The latest data and analysis from the HomeOwners Alliance and BLP Insurance has revealed that the UK’s housing market is broken at every level. According to the report, everyone from first timer buyers, second-steppers to downsizers are struggling.

A survey polling over 2000 UK adults online found millions of UK adults are failing to realise their dream of homeownership or are stuck in houses that are unsuitable for their needs as a result of affordability issues and lack of properties.

The study found that while almost three in four non-homeowners want to own their home one day, affordability problems are preventing them from doing so. The main reasons cited for not being able to buy their first home include: property prices are too high (66%), difficulty saving for a deposit (58%) and difficulty getting a new mortgage (31%).

Affordability is also the biggest barrier for second steppers. The biggest reason for considering a move but not moving among homeowners age 18-54 are house prices/ being able to afford to move (58%).

Of the 1.2 million homeowners age 18-54 (second-steppers), who have considered a move in the last two years but did not do so, 50% were moving to find a bigger property, suggesting these homeowners may be in homes too small for their needs.

Worryingly, considering how little they are considered in the Stamp Duty debate, second-steppers (homeowners age 18-54) are more likely than others to say the tax is a barrier (24%). This means Stamp Duty is a bigger concern for second-steppers than for any other segment of the market.

For last time buyers, one in five (20%) homeowners aged 55 or over considered a move in the past two years but have not done so; with lack of suitable housing (46%) the main barrier for following through with the plans.

A massive 46% of these last time buyers cite lack of suitable housing as a reason preventing their move, equating to more than 1 million homeowners.

Paula Higgins, Chief Executive, Homeowners Alliance, says: “These figures show the true scale – and indeed, the breadth – of the problems facing the housing market. Buyers and sellers at every single level are being met with problems and it’s clear that tinkering with just one area will not solve this crisis.“

The housing market is broken at every level. A massive 74% of people want to own their own homes, yet millions face the realisation that might never happen. At HomeOwners Alliance we’re doing all we can to help those struggling in the market with advice, calculators and tools but there needs to be some drastic action to address this. The government needs to come up with a long-term strategy. If 7.5 million people being locked out isn't a tipping point, what is?”

Kim Vernau, Chief Executive, BLP Insurance, said: “A comprehensively integrated approach is needed to cure the ills of the housing market. Government policies such as the abolition of stamp duty for first time buyers may have created positive headlines but it ignores the needs of large swathes of potential buyers. By recognising the interconnected nature of the housing market and implementing policies that will positively affect all, real progress can be made.”

One of the biggest challenges facing the sector is incentivising elderly individuals living in large, former family homes to downsize. Constructing an adequate stock of purposely-built homes for last time buyers, that meets their specific needs, has the potential to free up housing stock for first and second time buyers and inject much needed impetus into the whole market.”

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