The number of people who say now is a good time to buy a home has slumped to an all-time low in the face of rising living costs, according to the Building Societies Association.

Just 16% of those surveyed thought it was a good time to buy a property in the BSA’s June Property Tracker, the lowest figures since it began in 2008.

It adds that 39% disagree that now is a good time to buy a property, up from 33% in March.

The study says: “The main reasons those disagreeing gave was the current high level of house prices, 73%, as well as the impact of rising interest rates, 70%, and high inflation, 70%.”

High house prices mean that raising a deposit to buy a property remains the biggest barrier to homeownership, with 62% of those surveyed citing this factor. It adds that affording monthly mortgage repayments is the second most common barrier, at 53%.

The report comes as the Bank of England is widely expected to raise interest rates today, currently at 1%, for the fifth time since December. Earlier this week, the economy contracted by 0.3% in April after it shrank by 0.1% in March, the Office for National Statistics said. While last month UK inflation hit 9%, the highest rate in 40 years.

The BSA’s June tracker adds that 24% of renters admit they are not confident about paying their housing costs, double the number in the first quarter of 2021, and 50% higher than just three months ago. This compares with 6% of homeowners who say they’re worried about paying their mortgage.

The study says that rising prices “have left many people with no choice but to sacrifice not only discretionary spending, but to also cut back on essentials”.

It adds that 54% of Britons have cut their energy use and 31% plan to cut back on essentials such as food and clothing.

The study reveals that despite recent support measures outlined by chancellor Rishi Sunak last month, higher energy costs remain the biggest worry for 73% of those surveyed, while 66% are worried about food costs.

Also, 21% say they’re concerned about rising interest rates and 32% are worried about being able to save for the future.

The survey says that 20% are putting off bigger purchases such as cars, household items and holidays, with 21% planning to use their savings to deal with rising costs.

However, it adds that just 6% of people are looking to borrow more through consumer credit, or from friends and family, at 4%.

The report says that 12% of people don’t expect to have to make any changes, which only rises to 21% in households with incomes of £100,000 or more.

Building Societies Association head of mortgage and housing policy Paul Broadhead says: “It would have been naïve not to expect that people would be cutting back on their spending during the current cost of living crisis, but to see the extent to which people are struggling and being forced to cut back on essentials, such as heating and food, is concerning.

“While it’s encouraging that less than one in ten homeowners are concerned about keeping up with their mortgage payments, this is likely to be because it will take time for Bank rate rises to be felt by most borrowers, as around 80% are on fixed rates. Borrowers must however start planning for when their mortgage deal ends, as whilst the impact is likely to be quite modest, any increase in expenditure in the current environment will be unwelcome.

“Of greater concern is the growing number of people who are worried about paying their rent, which has doubled in the last 15 months. While the support packages provided by the government to date are obviously welcome interventions, it’s clear that for many, more support is needed if families are to survive the current crisis without increasing levels of personal debt.”

Hargreaves Lansdown senior personal finance analyst Sarah Coles adds: “Property buyers are getting cold feet in a heatwave. Higher house prices, runaway bills and rising rates have cooled their passion for property, and the vast majority aren’t convinced that now is a good time to buy.

“Meanwhile, higher prices are causing huge headaches for renters, and while those with fixed-rate mortgages are protected for now, they can expect real pain when they come to remortgage.

“Property prices are a victim of their own success. Among those who said they didn’t fancy buying right now, almost three-quarters have been put off by the enormous expense. Pressures building in the economy are taking a toll too, with seven in ten put off by inflation, and the same number worried by rising interest rates.

“This reflects the Rics report, which showed that buyers were starting to get more cautious. While estate agents still have several times more buyers than sellers on their books, there’s a growing risk that these won’t translate into sales. Cold feet tend to be contagious, so as more buyers pull out, we may well see sales ease off and property prices slow.

“Rising prices are hitting renters hard, particularly those who’ve renewed their tenancies in recent months, who’ve seen their costs climb at an alarming speed. Higher rents, coupled with a massive hike in the cost of everything else, means one in four aren’t sure they’ll be able to afford to keep a roof over their head in the next six months.

“Three-quarters of homeowners with mortgages are protected, for now, by fixed-rate mortgages, which is why only around one in 20 are worried about paying their mortgage at the moment. That’s likely to include many of the 2 million people on variable rate mortgages, and those who are coming up for a remortgage.

“Because while fixed-rate mortgages protect many homeowners for now, they’re storing up problems for when they have to remortgage. We haven’t seen rates rise this far over such a short period for over 30 years, and remortgagers will face all these rises in one fell swoop.

Coles says: “The good news is that at the moment, banks have so much lockdown savings swilling around that they aren’t passing on the full extent of the rate rise into their new fixed-rate mortgages, particularly when it comes to five-year fixed deals. According to Moneyfacts, the average two-year fixed rate is up 0.74 percentage points to 3.03% since November and the average five-year deal is up 0.58 percentage points to 3.17% – at a time when the Bank of England rate is up 0.9 percentage points.

“It means anyone with six months or less to run on their mortgage should consider locking in a new fixed rate now, to protect themselves from any further rate rises. The gap between two-year and five-year fixed rates is so narrow, that if it makes sense for your circumstances it’s well worth considering fixing for longer, and locking in that certainty for a longer period. Anyone with further to go needs to start considering now how they’re going to manage when their mortgage payments increase.”

The June Property Tracker survey was conducted on behalf of BSA by data firm YouGov between 1 and 6 June, with a representative sample of 2097 adults online.