The housing market stalled in May as a result of fewer moving, new figures from Connells Survey & Valuation show.
Valuations from home sellers have fallen steadily from 45% of the market in May 2010, down to just 27% in May 2017 as homeowners lack incentives to move.
The mortgage market is currently being supported by remortgaging which now represents 23% of all valuations – a 2 percentage point increase month-on-month and a record for May.
A shortage of homes on the market, stamp duty impacts at higher levels and the extended economic uncertainty have discouraged homeowners from moving on.
John Bagshaw, corporate services director of Connells Survey & Valuation, said: “The wind has been knocked out of the market’s sails. Fewer people are choosing to move home. The limited housing stock means that people already on the property ladder can’t see their next move in the market.
“After major votes and the economic turbulence of the past few years, many potential movers have adopted a near constant wait and see attitude. With a hung parliament heading into Brexit negotiations, the uncertainty in the market looks set to continue.
“The long-term increase in property values over the past seven years has reduced the financial incentive to move, with more homes slipping into the higher stamp duty bands. This means potential sellers could face a larger tax bill should they chose to move up the ladder when buying their next home, thus making it more difficult to free up housing stock to be used more efficiently.”
Bagshaw said that an increasing number of homeowners are choosing to improve rather than move.
“While rising long-term property values and political uncertainty have made moving home less attractive, they’ve driven up demand for remortgaging.
“With homes worth more than they were five years ago and low interest rates on offer from lenders, many have taken the opportunity to refinance for a better deal. This should cut monthly repayments and provide some additional financial security to help homeowners get through any potential economic uncertainty ahead.”
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