The average homeowner in the UK moves every 20.2 years.
More precisely, that average in the 1970’s and 80’s was around every 10 to 11 years; in the 1990’s it increased to around 15 years, and in the early part of the Millennium, it dropped again to the low teens. During the Credit Crunch years of 2008/09/10, the average shot up to every 25.3 years, and has been steadily decreasing ever since to the 2018 figure of 18.7 years.
The graph shows that as the economy improved after the Credit Crunch, British homeowners started to move home more often, and may have be taking advantage of the higher demand and lower supply in the housing market to sell their homes and move on to the next property. Yet, most Lancaster (and British) homeowners are more often than not buyers as well, so that cannot be the real cause. As mentioned already, people in the 70’s and 80’s moved a lot more often than today.
So why is the long-term average length of time between moves since 2000 still much higher than it was in the preceding 30 years? For existing homeowners, some people have said their lack of an appetite to move home compared to the 1970’s and 1980’s might come down to changes in mortgages and the need for higher equity to put down on the next house. It is true that the number of years you stay in your home determines how much you will pay back on the mortgage you took out when buying it. If you stay longer, you have the prospect of paying back a larger portion of the money you borrowed to buy the home. Interestingly, if you consider someone with a 25-year mortgage on the UK average variable rate of 3.4% for existing mortgage borrowers, who borrowed say £200,000 at the start of the mortgage and made monthly payments on that mortgage, it would take 15 years and 1 month to build up over 50% (or £100k) in equity (and 17 years 2 months if interest rates were at their historic average in the 1980’s and 1990’s of 7%) … all assuming there was no decrease in value of the property.
I personally think the issue is a lot deeper than that. Firstly, I believe there has been a long-term change in attitude to moving home and this lack of people moving home (compared to the last 30 years of the 20th Century) is part of a slowdown in the country in social mobility. Interestingly, a million fewer people moved in the noughties (2000 to 2010) than in the 1970’s, after other changes in population had been taken into consideration. You see, back in the 1970’s and 80’s, it was expected that people kept moving up the ‘property ladder’ to bigger and better homes (i.e. keeping up the Jones’).
Secondly, there has been a change in attitude to homeownership per se … as 20 to 30 somethings (Generation Rent) have been weaning themselves off the ‘homeownership drug’ that the baby boomers were addicted to in the 1970’s and 80’s … meaning there are fewer buyers at the bottom of the housing ladder to fuel the fire. This leads to another important factor in the long-term decrease in home moving… buy to let landlords have been buying the smaller style starter homes to house Generation Rent … yet landlords don’t tend to move up the housing ladder after a few years like first time buyers – landlords just buy another similar property.
So, what is happening in Lancaster with regard to people moving home?
I have mentioned a number of times in my articles about the Lancaster property market that the number of people who move home (i.e. the number of property transactions) is an important bellwether to the health of the local property market.
Therefore, I compared the number of people moving home in Lancaster to the regional stats of home movers and the country as a whole. I also decided to look at a long-term point of view to judge the Lancaster housing market, because as can be seen on the first graph, there is often short-term volatility. Looking at the stats…
Since 1995, Lancaster people have moved home 21.11% more often than the national average
Looking at this second graph, 95.6% of the Lancaster (LA1 to be precise) privately owned housing stock has been sold since 1995 – interesting when compared to the national figure of 79%. Why? Well, this might well be the topic of an up and coming article on the Lancaster Property Market Blog.