Before the recession, there were about 1.6 million home sales a year in the UK, which plummeted to 860,000 in 2009 but has since recovered to around 1.2 million. New research published by the Council of Mortgage Lenders (CML) suggests that the shortfall is largely the result of ‘missing movers’ – mortgaged home-owners not moving up the housing ladder.
The CML commissioned researchers Neal Hudson and Brian Green to explore the phenomenon. They suggest that ‘missing movers’ account for about 320,000 of the annual housing transaction shortfall. They point to a number of reasons for the decline, including the fact that there are now fewer mortgaged owners, and they tend to be older and so naturally less likely to move. However, there are still around 140,000 missing moves that can be attributed to a decline in the rates of moving among mortgaged home-owners.
Three factors determine the moving rate among this groups – their desire to move, sufficient funds, and the availability of a home they want to buy. Of these three factors, the research suggests that the availability of sufficient funds – specifically, sufficient equity – is the dominant factor holding back the mortgaged mover rate. The researchers observe that, in many ways, it is not the present but the past that is extraordinary. For five decades the market underwent changes that provided an enormous boost to the ability of people to buy and to own their homes. But expecting a return to those conditions is unrealistic, they suggest.