The Bank of England is to be blamed for the drastic slowing down of the property market, characterised by sellers’ reluctance.
The accusation comes from the Council of Mortgage Lenders which says that home owners would prefer to stay put and do up their current homes.
CML economist Bob Pannell says that it is nearly nearly three years since the Bank’s Financial Policy Committee intervened “to slow the future projector of the UK housing market”.
Pannell said: “Arguably it has been more successful than it was originally hoped.
“Whereas its consultation paper in June 2014 referred to a central scenario in which house purchase approvals would now be averaging 270,000 each quarter, the latest three-month total is only 205,000.”
Pannell goes on to say: “We do not share the Bank’s assessment that its policies have had little adverse impact on the housing market to date.
“We think it is more plausible than not that the Bank’s measures have contributed to lower levels of house purchase activity and made it harder to transact for older borrowers and for households with single incomes.”
He said that second-steppers may decide against moving up the housing ladder, instead deciding to extend their current home.
Pannell added: “House-moving activity represents the one major sector where we have seen almost no recovery post-crisis.”