Barriers to Moving
It’s a given that the recession has had a negative impact on people’s propensity to move home but recent You Gov research commissioned by Nationwide asked consumers specifically what they perceived as the barriers to moving home.
Whilst it proved the obvious concerns over the economy and the costs involved with moving, it also highlighted some more unexpected perceptions.
We were anticipating gripes about the level of stamp duty, particularly bearing in mind the end of the recent duty holiday.
However, surprisingly the two main barriers mentioned were solicitors’ costs and instability of house prices.
Most of those interviewed estimated that to move would cost them between £5,000 and £10,000. 45% saw costs involved as a major barrier (45%), with the majority rating solicitor fees as the biggest cost, rather than stamp duty or estate agents fees.
Solicitors’ costs are usually fixed from the outset and set at a level significantly below that of stamp duty but consumer perception may have added the two costs together under the solicitors’ fees banner.
We were less surprised that concerns over fluctuating house prices were also cited as a major barrier (28%), as memories of effects of the housing crash and resulting negative equity still remain raw in consumer-consciousness.
In reality as the Nationwide House Price Index proves while obviously prices do fluctuate, for the past few years they have only been doing so within a very narrow margin.
So in fact the current relative stability in house prices could mean that now is a good time to buy.
However as an industry perhaps we should be encouraging a shift in mindset - to refocus the market back to buying a property with a long term view, primarily as a home, with any increase in value as the secondary aim.
In fact our role as educators should not be underestimated – we need to manage adverse concerns around financial transactions, particularly as the purchase of a home is a major and uncommon transaction.
The context for today’s homebuyers certainly appears positive; we have seen the return of competitively priced deals, lower fees and a focus on customer service; base rates haven’t moved since March 2009 and while they show no sign of increasing, mortgages rates have begun a steady creep over the past 6-9 months, as funding costs increase.
As a result fixed rate deals remain increasingly popular as consumers seek to future-proof their outgoings and this should be encouraged as a means of insuring against arrears.
Going forward we believe the focus will remain on flexibility, keen up front costs to remove the initial barriers to moving and wider accessibility of lending.
Source : Mortgage Introducer