Why it’s getting harder to buy property

Looking for a new house? It won’t be easy. There just aren’t that many on the market. A statistic from The Times sums it up. In the 1980s, around 12% of all houses in the UK changed hands each year. In 2013, just 4% did. Why? More people are buying as an investment rather than a home (so they hold for longer).

The high price of housing prevents people from trading up. Rising life expectancy means older people stay longer in their own homes (so fewer come to market each year). And finally there is stamp duty.

In the 1980s, you paid nothing on houses under £30,000 and 1% on everything else. Today the cost is rather more prohibitive. You pay nothing under £125,000, but once you get to £500,000, you’ll be paying 4%. At £1m, you pay 5% – not just on the bit above £1m, but on the lot.

The difference is huge. A house worth £100,000 in 1985, then £150,000 in 1995, would cost around £525,000 today. So, say you bought such a house in 1995. You paid £1,500 then. If house prices had risen with general inflation (ie, by a lot less), you’d pay £2,442.15 in today’s money now.

But even at today’s actual house prices, if the stamp duty rate had stayed at 1%, you would still only pay £5,250 to buy the same house today. But it hasn’t stayed the same.

Instead, the stamp duty comes to £21,000 (I’ve used Halifax figures for house-price inflation, and National Statistics for the rest). No wonder we don’t move very often.

You’d think the pick-up in the market might make things easier. But it hasn’t. Some London agents say there are more and more two-bed flats coming on the market (as buy-to-let landlords take profits).

But, reports the National Association of Estate Agents, the number of houses on the market is down “between 25% and 80% on last year”, depending on the area. That’s why Strutt & Parker in Winchester can claim to have over 700 buyers on its waiting list with a total of £864m to spend.

It is an artificial market, of course – the government has both strangled supply (planning rules and high taxes) and bubbled demand (Help to Buy) – but it is what it is.

So if you really want to be in it, what’s the best way to get the house you want? There is, says buying agent Henry Pryor, one simple, if rather old-fashioned, way to get started. Register with all the agents.

A lot of buyers don’t bother these days – they reckon they can see everything online and call the agent when they see something they fancy. But a huge number of houses never make it to the public market or agents.

Registered buyers will know that they are soon to come on the market (via the agent, who will have got wind of a divorce or some such) and snap them up long before anyone looking at the likes of Rightmove even knows they exist.