Mortgages  

CML says home mover struggles need addressing

CML says home mover struggles need addressing

Helping homeowners move house could assist first-time buyers get on the housing ladder, the Council of Mortgage Lenders has said.

The CML has pointed out that while the number of first-time buyer transactions is recovering since the crash, the number of home movers has barely increased.

Since 2007 the number of first-time buyers has increased by 63 per cent on its post-crisis low but mover numbers have only gone up by 17 per cent.

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Mohammad Jamei, senior economist at the CML, said that while first-time buyers have benefitted from Help to Buy schemes, movers have had to “fend for themselves”.

He said: “You might say that first-time buyers have it much harder, and so need more help.

“This may be true in part but, at any point in time, the vast majority of properties coming on the market for sale are from existing home-owners, not newly built properties.

“If this cohort of people can’t move, they don’t put properties on the market, which means they hold up everyone behind them.

“This undersupply of properties for sale also pushes up prices, as a growing number of would-be buyers bid for a small pool of available properties.”

In the early 2000s there would be around 1.6 million property transactions a year but since the financial crisis there has been an average of 1.2 million.

Mr Jamei said building more houses to address this issue would not solve it in the short term.

He said: “Even if we manage to build 250,000 new homes a year for the next decade, more than 90 per cent of the housing stock that would exist in 2026 has already been built. So, we need to encourage better use of the current stock of houses.

“There’s also the option that government could intervene and help those stuck in the middle, as it has done to help first-time buyers.

"Helping movers could also have the added benefit of making more properties available for first-time buyers.

“But perhaps most importantly, we should first recognise that there is an issue here that needs to be addressed and discussed more widely.”

damian.fantato@ft.com