UK Housing ladder broken at every step

Statistics and Reports
  • 7.5 million1 aspiring homeowners unable to get on housing ladder
  • More than 3 million2 homeowners want to move house but cannot
  • 1 in 5 homeowners age 55+ considered a move but did not.  More than 1 million3 of these homeowners have nowhere to move to
  • Stamp duty bigger barrier for second-steppers than for first or last time buyers.  One quarter (24%) of second-steppers say stamp duty is the reason they can’t move
  • House prices are the top barrier for both getting on and moving up the ladder

The UK’s housing market is broken at every level with everyone from first timer buyers, second-steppers to downsizers struggling, latest research has revealed.

According to the Homeowners Survey 2018, polling over 2000 UK adults online, on behalf of HomeOwners Alliance and BLP Insurance, millions of UK adults are failing to realise their dream of homeownership or are stuck in houses that are unsuitable for their needs as a result of affordability issues and lack of properties.

The study found that while almost three in four non-homeowners (74%) want to own their home one day, affordability problems are preventing them from doing so. The main reasons cited for not being able to buy their first home include: property prices are too high (66%), difficulty saving for a deposit (58%) and difficulty getting a new mortgage (31%).

Affordability is also the biggest barrier for second steppers. The biggest reason for considering a move but not moving among homeowners age 18-54 are house prices/ being able to afford to move (58%).

Of the 1.2 million4 homeowners age 18-54 (second-steppers), who have considered a move in the last two years but did not do so, 50% were moving to find a bigger property, suggesting these homeowners may be in homes too small for their needs.

Worryingly, considering how little they are considered in the Stamp Duty debate, second-steppers (homeowners age 18-54) are more likely than others to say the tax is a barrier (24%). This means Stamp Duty is a bigger concern for second-steppers than for any other segment of the market.

For last time buyers, one in five (20%) homeowners aged 55 or over considered a move in the past two years but have not done so; with lack of suitable housing (46%) the main barrier for following through with the plans.

A massive 46% of these last time buyers cite lack of suitable housing as a reason preventing their move, equating to more than 1 million3 homeowners.

Paula Higgins, Chief Executive, Homeowners Alliance, says:

“These figures show the true scale – and indeed, the breadth – of the problems facing the housing market. Buyers and sellers at every single level are being met with problems and it’s clear that tinkering with just one area will not solve this crisis.“

“The housing market is broken at every level. A massive 74% of people want to own their own homes, yet millions face the realisation that might never happen. At HomeOwners Alliance we’re doing all we can to help those struggling in the market with advice, calculators and tools but there needs to be some drastic action to address this. The government needs to come up with a long-term strategy. If 7.5 million people being locked out isn’t a tipping point, what is?”

Kim Vernau, Chief Executive, BLP Insurance, says:

“A comprehensively integrated approach is needed to cure the ills of the housing market. Government policies such as the abolition of stamp duty for first time buyers may have created positive headlines but it ignores the needs of large swathes of potential buyers. By recognising the interconnected nature of the housing market and implementing policies that will positively affect all, real progress can be made.”

“One of the biggest challenges facing the sector is incentivising elderly individuals living in large, former family homes to downsize. Constructing an adequate stock of purposely-built homes for last time buyers, that meets their specific needs, has the potential to free up housing stock for first and second time buyers and inject much needed impetus into the whole market.”

Key Findings:

Aspiring First-Time Buyers:

  • Aspiration to own is at its highest level in six years equating to 7.5 million1 aspiring homeowners. Nearly three in four non-homeowners (74%) want to own their home one day. With 10 million non-homeowners in the UK, this equates to approximately 7.5 million aspiring homeowners.
  • Affordability is the main barrier to getting on the ladder for aspiring first-time buyers The main reasons cited for not being able to buy their first home: property prices too high (66%), difficulty saving a deposit (58%) and difficulty getting a mortgage (31%).

Second-Steppers:

  • Nearly a quarter (23%) of second-steppers (homeowners age 18-54) considered a move in the past two years but did not do so; equating to 1.2 million4 homeowners.
  • Half of second-steppers looking to move but not following through, wanted to do so for a bigger property; suggesting these homeowners may be in homes too small for their needs.
  • Affordability is the main barrier preventing a move for second-steppers (homeowners age 18-54 who considered a move but did not). Stamp duty and being able to increase an existing mortgage are relatively bigger issues for this group.
  • The biggest reason for considering a move but not moving among homeowners age 18-54 are house prices/ being able to afford to move (58%).
  • Second-steppers age 18-54are more likely than others to say stamp duty is a barrier (24%), as well as, difficulty increasing the value of their mortgage (18%).

Last-Time Buyers:

  • One in five (20%) homeowners aged 55 or over considered a move in the past two years but have not done so; equating to more than 2 million3 homeowners.
  • Lack of suitable housing is the main barrier among ‘Last-time buyers’, homeowners age 55+ who considered a move but did not proceed
  • 46% cite lack of suitable housing as a reason preventing their move (equating to more than 1 million3 homeowners).
  • Nearly two thirds (64%) of homeowners 55+ who considered but did not move say it was difficult to find a property with the characteristics they were looking for.
  • Relatively more important property characteristics for homeowners age 55+ than for younger homeowners and aspiring homeowners include: a garden/ outside space (80%), a property in good condition (no major improvements needed) (79%), parking (76%), low running costs/ maintenance (74%), good transport links (61%), proximity to friends/ family (47%), proximity to shops/ restaurants (40%) and living on one level (38%).

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