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Baby boomers hoard homes: Owners stay put for 23 years - three times longer than the 80s


04-13-2015

 

HOMEOWNERS today opt to improve rather than move, as properties change hands just once every 23 years on average.

Baby boomers are accused of hoarding homes

PA

Baby boomers are accused of hoarding homes

The typical length of ownership is now three times longer than it was in the 1980s when a home was typically told every eight years, according to a report by the Intermediary Mortgage Lenders Association (IMLA).

The low turnover is due to a baby boomer 'hoarding effect' as well as people buying their first home later and a larger private rented sector, said the trade body.

The prohibitive cost of stamp duty, which has soared in line with house prices, no doubt also encourages many owners from moving.

With housing supply limited and no change in the underlying factors, the situation is unlikely to change in the foreseeable future, predicted the IMLA.

The study also showed the decreasing role of home loans in property sales. Despite soaring house prices, mortgage finance reached an all time low in 2014, to make up less than the half value of housing transactions in Britain.

It means that just £4.17 of every £10 spent on house purchases last year was funded by a mortgage, as cash or equity made up £5.83.

The use of cash in the market, including deposits and cash purchases, is expected to top 60 per cent by 2016.

“These figures paint a picture of a housing market where turnover has drastically slowed in the last thirty years," said Peter Williams, executive director for IMLA.

"Quite simply, in the absence of a sustained rise in housebuilding and improved affordability and turnover, the fact that properties are coming onto the market less frequently severely limits the scope for would-be first time buyers to graduate to owning their own homes.

“Inertia in the property market spells danger for future owner-occupation levels, and the growing influence of cash and equity is sowing the seeds of a permanent social divide. Having said that, we will see some continued growth in mortgage lending – and as the market stabilises and wages rise, we may also start to see affordability improving.”

The report found that buyers who need a mortgage are more likely to turn to specialist lenders and building societies for the loan. Niche providers have grown their share of mortgage growing at the expense of big banks, who have typically shut their doors to the self-employed and other non-standard borrowers

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