A new report has revealed that asking prices for properties stalled in April and now people who are looking to downsize are the driving force of the property market.
Property website Rightmove has said the most frequent reasons for people selling their property is families wanting to downsize to a smaller home, the rise in mortgage rates and the difficulty of securing a larger mortgage from lenders given the current financial climate.
40 per cent of people in the report said they were looking to trade down compared to 25 per cent who were hoping to upgrade to a larger and more expensive property. With many people looking to downsize it leaves a gap at the lower end of the market. This has then resulted in the average asking price for new properties failing to rise between April and May for the first time in 11 years.
London differed from any other region which comes as no surprise as the people trading up outnumbered the people who were downsizing. The average asking price for a home in London remains the highest in the country costing people £469,314 compared to areas outside of London where the average asking price is £243,79.
Miles Shipside, Director of Rightmove, commented on the report: “There are more old people at the top of the chain trying to downsize and fewer at the bottom trying or able to trade up. The ability to trade up is a vital component of a healthy housing market.
“Some people may be facing redundancy and looking to reduce their outgoings, and others may be looking to supplement their underperforming pension pots.
“With overall market volumes already in the doldrums, we need a fair and consistent wind of mortgage lending to prompt a speedier housing market recovery.”
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By Amanda Bainbridge