Staying put: why people are moving home less (and what you can do about it)
Some experts are predicting tough times for the property sector. It's a simple fact that people are moving home less. The question is, why? We dive into the reasons and offer possible solutions.
As you know, some experts are predicting tough times ahead for the property sector. The cost of living crisis, the pessimistic economic outlook, and the general shortage of stock means that fewer people could be upping sticks and moving into a heavenly new home in the next twelve months. Maybe.
However, the tendency for people to move home less frequently isn’t actually a new phenomenon. It pre-existed the current economic uncertainty and goes back a decade or more. The question that’s bugging us like an itch between the shoulder blades, therefore, is why? And is there anything that us property professionals can do about it?
Moving is taxing
Money, money, money. Sadly, we can’t address this issue without considering how much it costs to move home these days. Twenty years ago, the average person would move about four times after bagging their first pad. But these days it’s just twice. And money is obviously a big reason why they’re moving home less.
According to Barclays, the average cost of moving home in the UK has risen to a sky-scraping £11,777. And as house prices have increased, so has the amount of stamp duty that people need to pay. With a 5% charge on purchase prices between £250,000-925,000 and as much as 12% once a price tops £1.5 million, home-movers are paying more tax than ever before.
The problem, of course, is that stamp duty affects almost everyone. And with the average UK property currently fetching just over £300k, that means a tidy sum of £5,350 (on average) is speeding its way to Kwasi Kwarteng every time a deal completes. It’s no surprise, therefore, that would-be movers are thinking, “hang on a sec” before taking the plunge.
The whacks to the wallet don’t stop there, either. A survey can set buyers back £500 to £1,500. And then there’s legal fees to consider: typically £800-£1,500 for a traditional conveyancer. Even cheap online companies cost a few hundred smackers. Finally, removals can cost £400-2000 depending on the buyer’s penchant for hoarding. And that’s before we even get into agents’ fees.
Time is money, too
Another problem is that it’s taking deals far too long to go from offer to exchange these days. What was once a 12-16 week exercise is now frequently taking longer than 20 weeks. And this is largely due to a conveyancing bottleneck. Too many conveyancers have left the profession (leaving the remaining ones overworked), whilst the rise of online conveyancers, who aren’t exactly known for their speediness, can slow things down to a molasses pace as well. Groan.
As a result, even properties in smaller chains can take an infuriatingly long time to progress. And that’s not exactly filling potential movers with confidence and optimism. Basically, moving just isn’t as simple as it should be. And Joe Public knows it, which is why people are moving home less.
Why list it when you can love it?
Today’s humans are also staying put because moving is no longer the default option when they fall out of love with (or outgrow) their existing home. Shows like Phil and Kirstie’s Love It or List It, Grand Designs, and DIY SOS have shown how it’s possible to transform a property. Consequently, home improvement projects have never been so fashionable nor builders so in demand.
Improving one’s existing home also makes a lot of financial sense for buyers - even though it can cost between £1,000-2000 per square foot. That’s because adding a bedroom can increase a property’s value by approximately 15% whereas a loft conversion can add about 21%.
As a result, buyers are increasingly doing the maths and concluding that paying a builder to upgrade their current digs is a better bet than moving to a larger pad up the road. The dust and disruption seem worth it when faced with rising property prices, conveyancing fees, and that dreaded stamp duty. The result? Once again, they’re moving home less.
Moving home less is a lifestyle
Finally, there’s one more factor that’s convincing modern folk to linger longer on their lily pad: lifestyle choices and socio-economic changes. After all, there’s less pressure or even opportunity to move than there used to be.
Empty nesters are a good example of this trend. Once upon a time, in a world where transactions were flowing like wine at a wedding, downsizing was something that most people felt compelled to do. However, empty nesters can now use equity release schemes, which enable them to take capital value out of their home without upping sticks, to pay bills or treat relatives instead. And this obviously reduces the number of homes coming back to market. Baby boomers enjoying final salary pensions with their mortgages paid off are in a similar boat. Moving home less makes perfect sense if you don’t want to move and don’t have to.
At the other end of the chain, first-time buyers (if they can get onto the property ladder in the first place) have less inclination, as well as less ability, to move regularly. This is because property prices are constantly marching upward and their payments are constantly being squeezed. Consequently, whereas a first-time buyer might have moved on within 24 months of purchasing their first home in the past, upsizing is now more complicated.
Remote working has also been something of a game-changer: it’s convenient, it’s good for the planet, and it can even boost workers’ productivity. Sadly, however, it means that fewer people are relocating when they change jobs. There’s also less pressure to move closer to the office. Nobody wants to commute when they can conduct business via Zoom. After all, you can wear what you want below your desk. Don’t pretend that you haven’t conducted the odd meeting in your pink frilly slippers.
People ARE moving home less - so what can we do about it?
Unfortunately, there’s not a fat lot agents can do about the costs of moving. Stamp duty isn’t going to be abolished anytime soon, thanks to the chunky national debt racked up during the pandemic, and traditional agents’ fees are already low because of competition with online rivals. Socio-economic factors are obviously outside of agents’ control, too.
But what the sector can do, however, is make moving less hassle. And fortunately, things are beginning to trend in that direction thanks to new technologies. For example, our own Home Setup Service (which can all be done digitally) takes care of a buyer’s move-related admin: from organising a removals company and informing the council to hunting down great deals on utilities, broadband and insurance.
We can also see a future where sellers, buyers, conveyancers and agents liaise through one centralised digital platform. Paperwork could then be exchanged more quickly while the whole process would become more transparent, too. Instead of moving home less, people might be more inclined to up sticks regularly if the process was streamlined and easily managed with just a few clicks.
We’d also like to see auction-style sales packs for all properties in the near future as well - so the sales particulars for every property would automatically include the Property Information Form, fixtures and fittings details, plus the preliminary legal work. This would get transactions off to a flying start and reduce the number of deals that collapse early on.
Finally, it wouldn’t hurt to remind potential customers of the pitfalls of renovation projects. Proud homeowners might love living in their beautifully remodelled homes, but they certainly won’t enjoy the dirt, disturbance and decibels involved when the builders are onsite. Let’s not forget that the cost of building projects can skyrocket, too. So sometimes it’s better to list it than be left with a listing ship sinking under the weight of unexpected bills.