There has been a decline in remortgage demand from homeowners and much of that has been blamed on negative equity levels and equity losses.  It may be a long time before remortgage demand reaches the level it was before the credit crisis as there are fewer homeowners overall.  According to a report from Home Owners Alliance (HOA) owner occupied properties have declined to the lowest level since 1988.  The report reveals that 2002 was the peak in owner occupied properties at 69.7% in the UK but it is currently at 64.7%.  This means the UK ranks 17^th of the 27 EU countries and is below that of Ireland, Italy and Romania.

Climbing onto the property ladder remains difficult for hopeful first time buyers.  It is estimated that there are 5 million households that are unable to purchase a home due to house prices, high deposit requirements and available affordable housing.  Those that cannot buy are facing competitive rental pricing which means higher rental fees that cut into the savings that would have been available for making a future deposit on a property.

Paula Higgins, chief executive of the HOA, said, “This decline in homeownership is depriving a generation of the chance to own the roof over their head, shattering their dreams and aspirations. It is preventing millions of people from living the sort of lives they want to. Buying your first home is returning to being a privilege of elites.”

Without first time buyers the property ladder remains still with little movement.  Homeowners without starter home buyers cannot upgrade and those wanting to sell larger properties have no buyers.  Those that want to downgrade properties are stuck as well.  Homeowners hoping for an equity boost and equity growth need first time buyers to enter the housing market once more and until then remortgage demand will remain low as many are out of reach of new deals with low or no equity as house prices and property values decline.