Recent BBC research suggests that homeowners are moving property less frequently now than they did before the 2008 recession. A number of reasons are cited, including higher house prices, stricter lending rules and fewer larger properties available on the market. The research undertaken by Savills for BBC News, shows that pre-2008 people were likely to move, on average, 3.6 times after buying their first property. Now, that is more like 1.8 times after buying their first property.
The knock-on effect on the housing market is that it is likely to become more stagnant as fewer people are looking to buy and sell their properties. Couple that with a decade of inflation that has eroded any wage growth and the result is a generation that has missed the opportunity to move on to the next rung of the housing ladder. Whilst home moves are happening less frequently, current homeowners are taking the opportunity to remortgage existing properties in order take advantage of historic low interest rates.
Mortgage brokers are seeing an increase in remortgaging business. According to the Paragon financial adviser confidence index, remortgage activity is accounting for approximately 41 per cent of business, compared with 37 per cent five years ago.
That trend suggests that more homeowners are investing in their current properties with redecoration, extensions and extended maintenance programmes in order to improve the quality of their current property, rather than trading up for a bigger or better property.
The knock-on effect of fewer housing transactions could cause a mid-market housing bubble due to a shortage of typical second-home properties, such as 2 or 3 bedroom houses.
If you are a homeowner looking to take advantage of historic low rates, or you are looking to secure some additional finance to make home improvements, call us on 01908 465 100. We’re a fee free mortgage broker, which means you won’t be charged a fee by us. We recover our fee from the lender, ensuring that we keep the cost of remortgaging as low as possible for you.