A survey commissioned by Nationwide Building Society has looked into the main reasons for the slow down in property transactions.
This follows the news from HMRC that the number of residential property transactions has halved since its 150,000 a month high in December 2006 to its current low of just over 70,000.
The research found that three-quarters of home owners have been in their current property for more than five years.
Meanwhile, 60% of non-homeowners have no current plans to buy a property in the foreseeable future and 38% have no intention of ever moving again.
For those homeowners whose property has become too small for them, 29% said they would extend or make do rather than move. Only 25% would look to move to a bigger home.
Nationwide asked homeowners what had affected their plans to move, and 45% of those surveyed mentioned either the state of the economy or the costs involved in moving home, or both, as representing the main barriers, with instability of house prices following behind at 28%.
When asked about financing their move, most people estimated it would cost them between £5,000 and £10,000 with most people rating solicitors’ fees as the biggest cost, rather than stamp duty or estate agents’ fees.
“A healthy housing market is key to a healthy economy which is why we are focussing our efforts on getting the nation moving again,” said Tracie Pearce, head of mortgages at Nationwide.
“It’s no surprise that the economy and costs are the main barriers to people moving. However, if people want to move we’d urge them to look at the options; many fixed rate mortgages are at an all time low and with offers like ours, upfront fees need not be a significant barrier.”
The entry level into the house market for first time buyers is too expensive! High deposits, higher interest rates, legal costs and tough criteria from most lenders. It would be interesting to know how many first time buyers have been declined a mortgage in the last 12 months. Without a good level of first time buyers the market will stagnate. The government initatives are nowhere near helpful enough. The Firstbuy scheme needs to be extended to re-sale properties and not just new homes.
The lenders need to look at rate and criteria and look for innovative ways to encourage home ownership. Also, don't forget about those homeowners who are locked into their present home because of limited equity. I remember the days when all lenders were offering negative equity mortgages to existing borrowers who have a proven track record of maintaining their mortgage payments. The mortgage rates were the same as any normal lending rates. I could go on and on……………!