Homeowners stay put as moving costs rise

13 April 2012

People are living in their homes for longer because of the huge expense of buying a new house, new research reveals.

Rising house prices and extra costs like stamp duty mean homeowners are putting off moving to a new house - and are improving their old one instead.

Moving house? Find out all you need to know about mortgages here

In the 1980s, people used to move home every 10 years, according to the property website Hometrack.

But this has changed. Today, people are more likely to delay a move, and only buy a new home every 15 years, because they are choosing to 'improve, not move.'

Growing numbers of people are creating more space by doing a loft conversion or building an extra room, rather than buying a bigger home.

This is because it usually involves taking out a bigger mortgage, paying a huge stamp duty bill and all the other expensive hassles of moving home.

The stamp duty bill is the biggest problem, as it is charged at a record three per cent on all homes over £250,000 and four per cent over £500,000.

Before Labour came to power in 1997, people buying expensive homes were not penalised as everybody paid a flat tax rate of one per cent.

Today if you move from a £500,000 home to a £600,000, you would pay about £10,000 to the sellers' agent and £24,000 in stamp duty.

Richard Donnell, research director at property website Hometrack, said: 'For most people, it is cheaper to do a loft conversion than move house.

'Higher stamp duty, moving costs and people already being mortgaged up to their eyeballs are all factors. In many cases, it is cheaper to add £30,000 onto your mortgage and stay put than it is to move.'

Since 1997, the number of planning applications has shot up nearly 30 per cent, and the majority are for 'household developments,' according to the figures from the Department for Communities and Local Government.

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