Why Are So Many Boston Homeowners Selling So Soon After Buying?

The UK property market has seen significant shifts in recent years, particularly during the pandemic.

One of those changes discussed by the Press are the number of properties for sale where the home seller is suffering from ‘buyers regret’. In estate and letting agency online forums, the ‘feeling’ is that there are a lot of properties on the market, where the owner purchased their home during the pandemic years of 2020 and 2021 yet are now back on the market.

There are 694,281 properties currently for sale in the UK and for 8.2% of them, the owner has only been in their home since the end of the lockdown.

This article will calculate the percentage for Boston (as the numbers are much smaller and more interesting to Boston people), the reasons behind this trend and its implications for the local housing market.

The Post-Lockdown Buying Frenzy in Boston

The pandemic brought unprecedented changes in the British property market. After the first lockdown in spring/early summer 2020, remote working became the norm, and many people re-evaluated their living situation. The desire for more indoor and outdoor space became a priority. This led to a surge in property purchases, particularly in suburban and rural areas. Buyers were eager to escape the confines of inner-city life, seeking more spacious and comfortable homes.

To give you an idea of the numbers, the average number of UK homes sold (including new homes) since 2005 has been 1,169,864 per year (or 292,466 per quarter). Yet, the average quarterly number of UK house sales in the 12 months between Oct 2020 and Sept 2021 was considerably more at 1,553,860 (or 388,465 per quarter).

However, this buying frenzy was driven not just by lifestyle changes but also by favourable economic conditions. Low interest rates and government incentives, such as the stamp duty holiday, made buying a property more attractive than ever. Many people took advantage of these conditions, leading to a boom in property sales.


So, how often do people move home?

 

Traditionally, homeowners in the UK tend to stay in their properties for a significant length of time. There are 17,693,200 owner-occupied homes in the UK, and in 2023, a total of 1,023,500 (1.02 million) homes were sold.

This 1.02 million figure includes 231,000 new homes, leaving 790,500 sales of existing (second-hand) homes. This is significant because it means that only 4.48% of existing owner-occupiers moved home in 2023, implying that, on average, existing homeowners move every 22 years and 17 weeks.

With this information, one would expect the number of homeowners looking to move so soon after buying their home to be relatively small. Therefore, we decided to analyse the properties for sale in Boston and see if the statistics match the anecdotal suggestions.

There are 354 properties currently for sale in the Boston area.

Out of these, 41 properties were purchased during the pandemic years of 2020/21.

The breakdown of these properties is as follows:

 

·         Detached Boston houses: 15

·         Semi-detached Boston houses: 11

·         Terraced Boston houses: 9

·         Boston Apartments: 0

·         Boston Bungalows: 6

 

This raises the question:

 

Why are 8.2% of UK (or 11.6% of Boston) homeowners looking to sell so soon after buying?

 

Several factors could be contributing to this trend:

  1. Overestimating the Appeal of Suburban/Rural Living: During the pandemic, moving to a more suburban/rural setting like Boston might have seemed idyllic. However, the reality of suburban/rural living - such as longer commutes, fewer amenities, and a different pace of life - might not have lived up to expectations for some homeowners. As a result, they are now looking to move again.

2.      Changes in Work Arrangements: While remote working was widely adopted during the pandemic, many companies are now calling employees back to the office, at least part-time. This shift can make living in more remote areas less practical, prompting homeowners to relocate closer to their workplaces.

  1. Economic Pressures: The financial landscape has also changed since the height of the pandemic. Rising interest rates will make homeownership less affordable for some people, leading them to sell their properties sooner than planned.
  2. Market Opportunities: The current property market might allow Boston homeowners to make a profit. With Boston property values having increased over the past few years, some owners might be looking to capitalise on this and sell their homes at a higher price.

Implications for the Boston Property Market

This higher-than-normal number of properties selling so soon after moving in will undoubtedly increase the number of homes for sale.

The average number of properties for sale in the UK in May 2017 was 568,845; in May 2018, it was 660,019; and in May 2019, it was 667,532 (an overall average of 632,132 for three years combined). In May 2024, it was 694,281 (as mentioned in the introduction).


This increase in the supply of homes for sale means Boston house sellers need to be realistic with their asking prices, as the competition is greater.

To back up the idea that realistic pricing is vital if you want to move home, only 53 out of every 100 properties leaving UK estate agents' books since January 2024 have been sold, exchanged and completed, while the other 47% have come off the market unsold.

Moreover, this trend could signal a shift in how people view homeownership post-pandemic. The rush to buy during the pandemic might have been more about immediate needs and desires than long-term plans. As the world returns to normalcy, people's housing preferences and requirements will likely evolve, leading to more dynamic movements in the property market.

Final thoughts -

The trend of pandemic-era homebuyers in Boston putting their properties back on the market highlights the fluid nature of the current property market. While the reasons for this trend are varied and complex, it reflects broader changes in how we live and work. As the property market continues to adjust to post-pandemic realities, buyers and sellers in Boston must stay informed and adaptable to navigate these changes successfully. One option to stay informed is to follow our agency on social media for more articles like this.

If you are considering moving soon after buying your Boston forever home only a few years ago and would like to discuss your options without any obligation, then let's have a chat.

 Why Hasn’t the Boston Property

Market Crashed?

The UK property market has demonstrated remarkable resilience despite facing significant challenges over the

past 18 months. Many analysts in the autumn of 2022 predicted a severe downturn in house prices, driven by

economic uncertainty, a cost-of-living crisis, and rising mortgage rates.

Yet, contrary to these grim forecasts, UK (and Boston) house prices have remained relatively stable. This

article delves into the reasons behind the unexpected stability of the property market, providing insights for

buy-to-let landlords and homeowners alike.

Economic Predictions vs Reality

In the autumn of 2022, following the controversial Liz Truss and Kwasi Kwarteng mini budget, there were

widespread predictions of a dramatic fall in UK house prices. Some forecasts suggested a potential decline of

between 20% and 35%. However, these predictions have yet to materialise. While there has been a slight drop

in prices since their peak in autumn 2022, the decrease has been modest, with official Land Registry figures

indicating a fall of about 3.12% in UK house prices in the last 18 months.

Yet if we look at the last 12 months, British house prices according to the Land Registry were 0.89% higher in

April 2024 than April 2023. Yet the issue with Land Registry data is that by its very definition, it is 6 to 8

months out of date, as it measures house prices agreed 6 to 8 months before that data is published.

Data from Denton House Research using live real time data of £/sq.ft sales agreed statistics indicate UK house

prices on the 97k sale agreed homes in May 2024 stood at £348/sq.ft.

For comparison, in April 2024 it was £344/sq.ft, in March 2024 and February 2024 it was £339/sq.ft and in

January 2024 it was £331/sq.ft, a rise of 5.13% since the New Year.

This resilience raises the question: Why were the forecasts so inaccurate?

Improved Lending Practices

One significant factor that has helped stabilise the property market is the improvement in lending practices.

During previous housing market downturns, banks often came under fire for poor lending standards. However,

changes to mortgage regulations in 2014 with the Mortgage Market Review (MMR) have made a considerable

difference this time. These regulations require banks to ensure borrowers can afford their monthly

repayments even if mortgage rates increase significantly. This precaution has provided a substantial buffer for

homeowners, enabling them to cope with rising rates.

For instance, in 2007, shortly before the global financial crisis, many borrowers did not need to prove their

income to their banks. The 2014 MMR changes addressed this issue, ensuring that lending was based on

sound financial footing. Consequently, many homeowners could afford higher mortgage payments when their

mortgage rates increased recently.


Employment and Wage Growth

Another crucial element has been the relatively stable employment situation. Although the UK experienced a

brief recession over this last winter, unemployment rates have remained low at 4.3%, compared to 8.5%

during the 2008 global financial crisis. Moreover, average wages (including bonuses) have increased by 5.7%

over the past year, reaching their record-high level of £682 per week.

This combination of low unemployment and rising wages means that fewer homeowners have been forced to

sell their properties due to financial difficulties. Even those facing financial challenges have found support

from proactive banks, which have offered solutions such as interest-only payments or extended mortgage

terms to help them manage their repayments.

Supply and Demand Property Market Dynamics

The impact of economic challenges on the property market has been more evident in transaction volumes

than in prices. Typically, there are about 1.16 million house sale completions annually in the UK. However, this

number surged to 1.48 million in 2021 due to the lockdown inducing ‘race-for-space’. It then dropped to 1.26

million in 2022 and further to 1.02 million last year.


While demand has decreased because of higher mortgage costs, supply has also reduced as potential sellers

have chosen to wait for better market conditions.

There was an 11.5% increase in net house sales in the first five months of 2024 compared to the first five

months of 2023 (400,697 UK net house sales YTD to 26th May 2024 vs 359,523 UK net house sales), but only a

9.9% rise in new homes coming to the market (745,715 UK listings YTD to 26th May 2024 vs 678,845 UK

listings).


First-Time Buyers and the Rental Market

First-time buyers have been particularly affected by rising mortgage rates, as they typically need to borrow a

larger proportion of their homes value. Despite this, they have been more active than expected, partly due to

the rapid rise in rental prices. High rental costs have motivated many to purchase homes, often with financial

help from their families. Data from the English Housing Survey revealed that just over 11 out of 30 first-time

buyers received financial gifts from their families in the past year, up from 8 out of 30 in 2022. This support

has played a vital role in maintaining activity in the housing market.

Boston Property Market

So how is all this affecting the Boston property market? One measure is judging what people are paying for

Boston homes.

Looking at the monthly exchange of contracts data, the average price paid from May 2019 to

April 2020 for a Boston home (PE21) was £155,135. The average price paid in the last year


(June 2023 to May 2024), has been £188,960, a growth of 21.8%.


Now, it is important to stress, this does not mean Boston house prices have risen by 21.8%, just the average

price paid between the two 12-month periods has changed. Over the coming weeks and months, we will be

analysing the £/sq.ft data for Boston and reporting back in the Boston Property Blog.


Outlook for House Prices

Eighteen months ago, economists almost unanimously predicted a decline in house prices. Now, many are

forecasting growth. Estimates vary, with some predicting a 4% increase, although this might be optimistic.

Other estimates suggest a 3% rise, while some analysts expect prices to remain broadly flat this year due to

stretched affordability, especially for first-time buyers.

The UK property market has shown an impressive ability to weather economic storms, thanks to sound

lending practices, stable employment, rising wages, and family support for first-time buyers. Whilst

transaction volumes have taken a hit from the heady days of 2021 and the long-term average, this has meant,

along with the other factors mentioned in the article, house prices have remained more stable than many

predicted.

If you are wondering about the general election’s effect on the property market, it is our belief it will have

hardly any effect on the medium-term direction of the property market (on the assumption neither of the main

parties have any ‘creative and wacky’ policies not yet published at the time of writing this article).

So, as we progress into the second part of 2024 and beyond, the property markets resilience will continue to

be tested, but the foundations laid in recent years provide a solid base for navigating future challenges.