Rightmove reports property downsizing trend
Two in five property owners planning to sell in the next year are planning to ‘trade down’, compared with one in four who plan to ‘trade up’.
A survey by property website Rightmove found that moving to a smaller home is the main reason for moving in nine out of the ten regions in the UK.
London, where there is a greater proportion of wealthy homeowners, is the only region where the majority of house movers want a larger property.
Rightmove attributed the downsizing trend to the UK’s aging population combined with a shortage of mortgages for potential first-time buyers.
Miles Shipside, director of Rightmove, said: “The ability to trade up is a vital component of a healthy housing market.
“There are more old people at the top of the chain trying to downsize and fewer at the bottom trying or able to trade up.
“Some people may be facing redundancy and looking to reduce their outgoings, and others may be looking to supplement their underperforming pension pots.”
There was a 10 per cent fall in the number of properties coming to market last month and demand from first-time buyers has fallen substantially since the stamp duty holiday on homes between £125,000 and £250,000 ended in March.
There is growing concern that the supply of mortgages could be further hampered if Greece defaults on its debt.
The decision by Santander UK to scale back its lending to home buyers from 25 per cent to 14 per cent will add to the mortgage scarcity.
Santander’s decision follows a downgrade of its credit rating by Moody’s.
“With overall market volumes already in the doldrums, we need a fair and consistent wind of mortgage lending to prompt a speedier housing market recovery,” Mr Shipside said.
Separate research by Lloyds TSB Private Banking suggests that house prices have contributed to a 55 per cent increase in household wealth to £242,000 over the past decade.
Families are now worth an extra £86,000 according to the study, largely because the value of property has outpaced rising mortgage debt.