The decline and fall of just about everything appears to be the order of the day, and we’re not even finished with January yet. So far this year, we have learnt that the number of people moving home has fallen for the first time in five years, thanks to tighter mortgage regulations, rising property prices and economic uncertainty about Brexit.
According to research from Lloyds Bank, 354,000 people moved house with a mortgage last year, marking the first annual decline in transactions since 2011. The latest UK Residential Market Survey from Rics showed that the number of sales faltered in December, and predictions for expected transactions in the next three months have also been pared back. It isn’t just estate agents who are anxious about having less business, but all those involved in the chain, from solicitors to removal firms.
At the same time, the value of private property wealth has reached £5 trillion, according to a study by Savills estate agency. If you include homes not owned privately, the nation’s housing stock is worth £6.79 trillion, or 3.65 times the national GDP, having risen by £491bn in 2016 and £1.86 trillion in five years. Yet the most expensive boroughs — Kensington and Chelsea, Westminster, Hammersmith & Fulham, Richmond and Camden — have lost £9.6bn (9%) of their £105bn five-year gains thanks to the increased stamp duty. This was more than made up for by growth in outer London, driven by buyers seeking more affordable neighbourhoods. But there are still laggards, in particular parts of the north of England, where weaknesses in the local economy suggest house-price recovery is still some way off.
A starker divide is revealed by looking at how housing equity is split across the generations. The over-65s now hold £1.42 trillion, or 43% of all equity held by owner-occupiers. By contrast, the under-35s — the generation struggling most to access home ownership — hold just £70bn (5%) of that equity pot, while the 35-49 age group accounts for about a third of all owner-occupier debt — more than £500bn.
The flipside, of course, is that many more of you may be planning to improve your homes. That’s good news for builders and architects, plumbers and project managers. Tell me what the market is like in your area.