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Homes changing hands once every 20 years

Homes changing hands once every 20 years

Category: Mortgages

Updated: 15/12/2010
First Published: 15/12/2010

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The slowdown in the property market means that homes are now only changing hands at a rate of once every 20 years.

The startling statistic is revealed in the 2011 housing market forecast from the Council of Mortgage Lenders (CML).

Predicting that the number of property transactions will total 860,000 next year, a similar amount to that seen in the past three years, the trade body said recent sale levels mean that each property in the UK's stock of 18 million privately owned homes is sold just once every two decades.

Elsewhere amongst its predictions, the CML suggests that activity in the housing and mortgage markets will remain broadly flat in 2011.

With public sector spending cuts likely to result in a difficult jobs market in the years ahead, and with households also seeking to reduce levels of indebtedness, the trade body said that demand for mortgages may be subdued for some time.

Given the continuing economic uncertainties, the CML said there is little to encourage buyers.

It also believes that the number of people remortgaging will remain subdued in 2011. "With interest rates staying at historically low levels, there is little incentive for buyers to rush to take advantage of existing fixed-rate deals," said the forecast.

"Borrowers currently on attractively priced standard variable rates also have little incentive to change. And many of those borrowers who would like to switch in order to pay a lower rate do not have enough equity in their property to meet the loan criteria."

It is also thought that first-time buyers will continue to find it difficult to get into the market, although one crumb of consolation might be that house prices are unlikely to rise significantly.

However, while recent house price weakness is predicted to persist for some months yet, the CML said it does not foresee any sharp fall in prices.

"The economy – and housing and mortgage markets – have made significant progress since the financial crisis of two years ago and now appear to be on a more stable footing," concluded the CML.

"But recovery has been patchy and weak. The supply of funds to the mortgage market remains much more limited than before the crisis, and households are much less confident about taking on large-scale borrowing commitments."

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