The Middle Rung Is Missing

Good morning,

You've heard it a hundred times: first-time buyers are locked out of the housing market.

Except the latest official data says the opposite. First-time buyers are now more than half the market.

So who's actually gone missing?

The people trying to move up.

Let’s dive in.

In this newsletter, you'll find...

• The 372,000 people who stopped moving

• If you remember one thing, make it this

• Feedback

The 372,000 people who stopped moving

Right, so last Friday the ONS dropped a new set of mortgage figures. Most of the coverage zoomed in on first-time buyer deposits.

The more interesting number got buried.

Back in 2006, around 699,000 mortgages went to people who were selling one home and buying another. Your classic "second stepper".

In 2025? Just 327,000.

That's roughly 372,000 fewer home moves a year. More than half of them, gone.

Meanwhile, first-time buyer mortgages held steady at around 379,000. They now make up 52.8% of all mortgage sales, up from about a third in 2006.

Translation?

The bottom of the ladder is busy. It's the step above it that's broken.

Why Nobody Can Step Up

Here's the bit that explains it, and it's hiding in the Land Registry data.

In England, the average first-time buyer pays £246,000. The average person moving home pays £357,000.

That's a £111,000 gap to close. And the usual way you close it is with the equity from your first home.

Now look at what's happening to first homes. Flats in England fell 3.5% in value over the past year, while semi-detached houses rose 2.7%.

In London, flats dropped 6.6%.

So the thing you own is shrinking, and the thing you want is getting pricier. Same ladder. Rungs moving in opposite directions.

Add in five-year fixed mortgages now averaging around 5.8%, compared with 2.6% back in 2021, and plenty of people are doing the maths and deciding to stay put.

Can't blame them.

The Bit Nobody's Connecting

Even the people who do try to move are struggling to sell.

Rightmove says homes for sale are at a 12-year high for this time of year. But only 61% of homes that come to market actually find a buyer.

And that number changes a lot depending on where you are:

• Scotland: 91%

• North West: 71%

• South East: 56%

• London: 42%

Less than half of London homes are selling. And even when a buyer turns up, the whole process takes around seven months from listing to moving day.

So you get a jam. Flat owners can't sell, so they can't move up, so the family homes they'd have bought sit in a slower market too.

So What Do You Do With This?

If you own a flat and you're eyeing your next move, stop waiting for prices to "come back".

Run the numbers on letting your flat and renting a bigger place instead. For a lot of people right now, that's the move that actually works. Just check the tax and mortgage rules before you do it.

If you're an investor, add one question to every deal: if I needed to sell this in five years, would someone actually buy it?

A 7% yield where 42% of homes sell is not the same investment as a 7% yield where 71% sell. How easily you can sell (what the pros call "liquidity") is part of your return, even if it never shows up on the spreadsheet.

And keep an eye on family houses. If would-be movers can't buy them, many end up renting them instead. That's where rental demand is quietly building.

If you remember one thing, make it this

The story isn't that young people can't get on the ladder. It's that once they're on, they're getting stuck on the first rung.

The Budget lands on 28 October. If there's any change to stamp duty, watch whether it helps movers or just first-time buyers. That'll tell you if the jam is about to clear.

Are you stuck on the first rung yourself? Hit reply and tell me. I'd genuinely like to know what you're seeing.