We might like to think of the UK as a nation of home movers, particularly given the amount of attention devoted to the housing market, but recent research suggests the reality is now very different, with the average homeowner moving just once every 21 years compared with approximately once every nine years during the late 1980s.
For mortgage advisers, that should be a particularly striking statistic because it demonstrates just how much the purchase market has changed and how important it has become to maximise the value of every client relationship.
After all, if an existing homeowner might only generate a purchase transaction once every two decades, firms cannot build their client strategies around waiting for the next move, particularly when there are no guarantees that the adviser will automatically secure that business when it eventually arrives.
There will clearly be mortgage interactions during those 21 years, whether every two, three or five years, but even here the market has changed considerably as product transfers have grown and more borrowers remain with their existing lender.
That does not diminish the value of mortgage advice, but it does reinforce why advisers need to think beyond individual mortgage transactions and create reasons to communicate with clients throughout the relationship.
Housing mobility has become a major issue
The reduction in home moves is not simply an issue for mortgage and property businesses, because lower housing and social mobility has much wider implications for the economy and the effective use of the existing housing stock.
Annual transactions are now running at around one million to 1.2 million compared with between 1.5 million and 1.8 million during the early 2000s, while the Yorkshire Building Society research estimates each property transaction produces approximately £27,000 of economic value through the associated activity it generates.
There is therefore a considerable economic benefit attached to getting people moving more regularly, while the Treasury itself benefits from the tax revenue generated by transactions and the spending which accompanies them.
This is why the debate about stamp duty cannot simply be reduced to whether the government can afford to collect less tax from individual purchases, because the more important question might be whether a different structure could generate greater overall activity and, as a result, greater economic and tax receipts elsewhere.
With the Budget now only weeks away, it would be surprising if pressure did not continue to build for the government to address property taxation in some meaningful way.
This is not just about downsizers
There has understandably been considerable focus on older homeowners who might wish to downsize but find the financial cost of doing so difficult to justify, particularly when stamp duty can consume a sizeable amount of the money involved.
However, this is not simply a downsizing problem, with second-steppers and other existing homeowners also having to consider whether the cost of stamp duty, legals, removals and the other expenses associated with moving can be justified.
That creates blockages throughout the market, because somebody deciding not to move does not simply remove one transaction, but can prevent a property becoming available to another household and potentially stop an entire chain from forming.
It also puts the intense political focus on first-time buyers into an interesting context, because supporting more people into home ownership is clearly important, but we should also be asking what happens after they have bought their first property if the average period before another move is now measured in decades.
Advisers cannot wait for the natural contact points
From an advice business perspective, the implications should be clear, because firms need to create their own opportunities for meaningful client contact rather than relying solely upon a mortgage maturity or a future house move to provide them.
A client should not disappear into a database for two, three or five years until their mortgage requires attention, particularly when their circumstances and financial needs may change considerably during that period.
Regular communication creates opportunities to discuss those changes, reinforce
the value of advice and ensure clients understand the wider range of services available through the firm, whether that involves protection, general insurance, later life needs or support when they eventually decide to move.
It also becomes particularly important in a PT-heavy market, where the mortgage transaction itself may be relatively straightforward and therefore provide fewer natural opportunities to introduce other services.
Conveyancing should be part of the proposition
When purchase opportunities are becoming less frequent, advisers should certainly not be allowing one of the most important parts of that transaction to simply walk out of the door.
Conveyancing advice gives firms another way to support the client, retain greater visibility over the transaction and generate an additional income stream from business they are already helping to facilitate. That is central to our proposition, because we believe conveyancing should sit naturally alongside mortgage advice rather than being treated as somebody else's responsibility once the finance has been arranged.
Hopefully, policy changes can help us move closer to being a nation of home movers once again, because greater housing mobility would be positive for consumers, advisers, the property industry, economic growth and the Treasury.
Until then, the message for advice firms is straightforward: if purchase transactions are going to come around less frequently, every client interaction matters more, and ensuring conveyancing forms part of the service offered is one practical way to make those relationships more valuable for both the client and the business.
