A detailed analysis of the UK housing market by The Economist suggest many reasons lie behind the slump in property transactions - and the main one may not be Brexit uncertainty, stamp duty or a shortage of stock.
Instead, says the financial publication, it may be squeezed living standards making people think twice about moving.
The Economist says that it looks like this year’s total number of transactions - many forecast around 1.2m - will be the lowest since at least 2013.
It cites many problems as contributing to this, including the low number of new homes being built, the fact that an ageing population moves house less, plus stamp duty levels - especially damaging to the London market - as well as broad levels of economic uncertainty fuelled by Brexit and a minority government in Westminster.
A larger factor than many believe is the growing tendancy to live alone, says The Economist. In an article on the subject, it says: “Since 1981, the share of households with one occupant has risen from 20 per cent to nearly 30 per cent. Singletons are less likely than those with children to need extra space, so they may not need to move up the housing ladder.”
However, it says the biggest reason may be Britons’ squeezed living standards.
It cites a recent paper by property analysts Neal Hudson and Brian Green reminding us that people can only move up the housing ladder if they have the money to pay agents and have enough for a deposit.
“Unfortunately, since the 1980s, the growth rate of real household disposable income has fallen from about three per cent a year to one per cent. Things have worsened since Britons voted to leave the EU as higher inflation has eaten away at wages. With poor income growth it becomes harder for homeowners to amass the savings necessary to move up the housing ladder. Indeed the household savings rate recently reached its lowest level since records began in 1963” it says.
The Economist says record cheap borrowing costs have not mitigated this.
“In other ways borrowing is harder than it was. Interest-only mortgages are a thing of the past and regulators have put limits on high loan-to-income mortgages. Homeowners must instead stump up bigger deposits," say Messrs Hudson and Green. "The average deposit is now roughly equal to the average annual pre-tax salary.”