Fri 22 Jun 2018 View all news articles

Work driving UK property market

Britons are seven times more likely to be moving home because of a change of job (23%) rather than to make a profit from the housing market (3%), according to new property research from AA Mortgages.

Summer movers are planning to spend 3% less on a new home than they were at the start of the year, the AA said.

The study of 2,133 adults suggests that a career change or moving closer to the workplace is most likely to dictate when and where people decide to move house this summer.

In the same month that the ONS reported the employment rate (75.6%) is at its highest since comparable records began in 1971, the AA home buying tracker shows work-related reasons for moving home have risen from 17% to 23% in just three months. This is the only significant increase in people’s reasons for moving home during the period. Deciding to move house for work reasons was most prevalent among the under 25s, where it rose to 39%.

Rather than trading up, the AA data suggests those planning a house move in the months ahead are more likely to be looking for ways to free up some disposable income. The second most popular reason for moving this quarter was people saying they needed to live in a cheaper area (12%) and 7% were looking to downsize to release some equity in their home.

For 11% of respondents, preparing to start a family or expecting a new baby was the factor triggering a house move because they simply need an extra bedroom or more space. A further 10% of respondents said they were making plans to move closer to their family.

Top 10 reasons for moving home this quarter:

1. Work (e.g. change of job/be nearer work): 23%

2. I need to live in a cheaper area: 12%

3. Preparing for a family/ having another baby: 11%

4. I dislike my current neighbours/area: 11%

5. To be closer to family: 10%

6. I want to move to the country: 10%

7. Downsizing to release some capital/equity: 7%

8. I want to be closer to local amenities: 5%

9. Divorce: 4%

10. Marriage: 4%

The AA research suggests that there is a clear link between age or life stage and moving plans. The younger generation (18-24 year olds) were most likely to be planning a move to advance their career as well looking for a cheaper area to live (14%). Respondents aged between 25-34 years old were planning a move because they needed more space for their growing family (24%), as well as relocating to a nicer area (14%).

In contrast, older homeowners (55+), were by some distance most likely to be downsizing to release some capital (28%), moving to be closer to family (26%) and relocating to the countryside for a quieter pace of life (19%).

David Searle, the AA’s managing director of financial services, said: “From a legacy of endless daytime TV shows, one can get the impression that buying and selling homes is just about making a quick profit on a property transaction. Our research puts this to rest as, beyond doubt, the reasons why and when people move are based on jobs, children, family connections and quality of life. A house is, after all, a home.

“Whilst decisions about when to move are not really about money, the realities of running a family home often are. Our survey shows many people are concerned about how far their pay packet will stretch and being smart in making their disposable income go further.

“Remortgaging can be a clever way to help people restructure their finances and get a better mortgage rate. At the AA, we even allow mortgage overpayments for as a little a £1 to make it easier for people to pay off their mortgage early. And for those moving home, the AA is working hard to help make the transition smoother for homeowners by offering a range of finance, emergency and insurance services that take some of the headache out of moving home.”

Source: Best Advice

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