The top of the market
Just shy of 1.3 million people bought a home in 2007 - a decade ago and the top of the last housing market cycle. Very soon after buying, these people saw the value of their home dip to below what they’d paid for it. For most, the fall in value was a paper loss as they sat tight, with no need to move on or sell up. But many of those who did sell in the first few years of the downturn turned that paper loss into real money.
In the ten years since 2007, just over a third (34%) of those who bought a home at the top of the market have sold it. This is a much smaller proportion than those who bought in any of the previous five years. The ‘2007-ers’ have been more likely to stay put, with many waiting for the value of their home to recover to allow them to move. Just 31% of those people who bought in 2007 and sold in 2009 got their money back. But 74% of those who waited for a decade sold for at least as much as they paid.
House prices in London have grown faster and to much higher levels than anywhere in the country and that allowed London sellers to be able to move sooner. Londoners who bought back in 2007 have proved the most likely to move on and have done so more quickly. Half of Londoners who bought in 2007 have now sold. During that decade, just 16% sold their home for less than they paid for it. And rather than waiting a full decade for prices to recover, the vast majority of this 16% sold between 2009 and 2012 when the market was at its lowest point.
For many homeowners, the late 2007 downturn is all but a distant memory. And since the crash there are some 2.4 million new owners. These people have only ever seen the value of their property go up. But a decade isn’t such a long time and a significant minority of the people who bought in 2007, right at the very top of the market, know all too well that the value of their home can go down as well as up.