The proportion of homeowners selling within three years of buying has fallen to its lowest level on record as moving costs and weaker price growth discourage housing market churn.
Connells Group analysis of Land Registry data shows just 5% of sellers in England and Wales this year owned their property for less than three years, down from 15% in 2006.
Only 14% sold within five years, half the 29% recorded two decades ago, while the share moving within ten years dropped from 47% to 32%.
The average seller has now owned their property for 12.3 years, compared with 9.2 years a decade earlier.
MARKET COULD BE MISSING 439,000 SALES
Connells estimates there would be approximately 439,000 more transactions annually if homeowners moved as frequently as they did in 2006.
The reduction has implications for estate agents and the wider economy, while limiting the ability of households to adjust their housing as their family, employment or lifestyle needs change.
Aneisha Beveridge (mai picture), Research Director at Connells Group, says: “Homeowners are increasingly finding that moving no longer pays. High stamp duty costs, higher mortgage rates and weaker price growth have created a cocktail of reasons why many households are staying put for longer than they otherwise would.
“The result is that homeowners are less likely to make small, incremental steps up or down the housing ladder; when they do move, it increasingly needs to be a bigger, longer-term decision.”
STAMP DUTY ADDS TO BARRIER
The typical mover in England pays £5,950 in Stamp Duty, rising to £23,000 in London, before estate agency, conveyancing, mortgage and removal costs are considered.
Higher borrowing costs have also left some owners waiting for mortgage rates to decline, while weaker price growth has reduced the equity available to fund another purchase.
One in five sellers who owned their home for five years or less sold at a loss this year. Among those selling within three years, the proportion rose to 23%.
Around 32% of homes originally purchased for £1m or more are now estimated to be worth less than their purchase price, compared with 7.5% of properties bought below £1m.
LONDON RECORDS SHARPEST DECLINE
Only 9% of London sellers bought their home within the previous five years, down from 27% in 2006 and the lowest proportion of any region.
An estimated 21% of homes in the capital are now worth less than their owners paid, compared with 7.9% nationally.
Beveridge adds: “Lower churn doesn’t just weigh on housing transactions, it reduces the efficiency with which the existing housing stock is used and can act as a drag on wider economic growth and productivity.”
