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As we always say, property market headlines can appear contradictory and can often be confusing. Transactions at record lows, transactions at record highs – and with all this information flying around, it can sometimes be difficult to determine what’s what when it comes to the property market.
Whatever the property market reports say, people tend to stay in their homes for longer than is generally believed. But what does this mean? If people are staying put for longer than average, it may be for a multitude of reasons, and the same logic applies if people are moving a lot, too. It could be a lack of optimism in property cycles, climbing prices or, on a happier note, people simply love where they live and see no reason to move. Whatever the reason, the amount of time people stay in their homes undoubtedly speaks volumes about, not only the local market, but the area and the people who choose to live there.
In England and Wales, the average amount of time between sales is 19.7 years. On a regional level, the figure ranges from a low of 18 years in the South West to a high of 24 years in London (although this is likely to be skewed by investment properties, which are included within the sample). In the wake of the 2008 credit crunch, the amount of time between homes rose dramatically, peaking at just under 31 years. Since then, however, it has steadily declined to where it sits today, as the market has stabilised and rebalanced.
It is important to know what your local market is up to and to understand the pace at which people move in the area, so you can realistically manage your expectations on how quickly your property will sell.
There are many factors that will influence how frequently people move home. In some instances, it may be due to an imbalance of supply and demand. For example, some streets may be deemed more desirable to live on due to location, aesthetic and price. Homes located on these sought after roads are likely to have waiting lists of buyers ready to pounce as soon as a property comes on the market. Having several market-ready buyers is undoubtedly a sign of a buoyant market, but if these buyers have time to spare waiting for their perfect house on their perfect street, transaction numbers will be low, despite this. Alternatively, it may be a symptom of a slow local market altogether.
Interest rates are a double-edged sword when it comes to the property market. Rising interest rates, or even just the potential of rising interest rates, makes mortgages more expensive and therefore discourages people from moving. However, high-interest rates often accompany high levels of inflation which, by eroding mortgage debt, can encourage people to move quicker, and therefore decrease the time between moves.
Interestingly, job type also has an effect on buyer activity. Areas with a high concentration of residents who work in financial services, also tend to have higher turnover, perhaps due to residents increased knowledge about the financial side of moving house.
Whether you’ve been in your home for the best part of 2 decades and are ready to move on, or are looking to take your first steps onto the property ladder, Andrews will be able to help you with your move. Find your local branch to see how we can help you on your property journey.