4 minute read
- The number of house sales is growing gradually
- There has been a growth in the number of cash buyers
- However, people with a mortgage don’t appear to be moving
The housing market is recovering, but it looks quite different to how it did before the financial crisis of 2007. Nationwide’s Senior Economic Analyst, Andrew Harvey, looks at what’s changed.
There’s been a gradual recovery in housing market activity. In the twelve months to June around 1.2 million homes were bought (and sold), which works out as about 1 in 20 households transacting during the year. That may sound a lot, but it’s still around 30% below the 1 in 13 households who used to move house in a typical year before the financial crisis in 2007.
The picture is even more mixed when we look at the types of transactions taking place. The number of cash purchasers (c.440,000 of them in the 12 months to June) is now above its pre-2007 level. By contrast the number of people buying a home with a mortgage (including buy to let) is still down around 40%. Within this category, the type of transaction that is down the most is not - as you might expect - first-time buyers, but people moving house that already have a mortgage. The number of home movers is still only half the level seen in 2007.
In the rest of this post we look to explore what might be behind this trend.