There has been a decline in consumer confidence in the housing market, says the Building Societies Association (BSA), with just 15% of people thinking now is a good time to buy a property, down from 26% a year ago.
However, BSA’s latest property tracker survey, found that looking at the country as a whole, there are some regional differences.
One in five or 19% people of in London and the North East agree that now is a good time to buy, compared to around half that number (11%) in Scotland.
Those who think now is not a good time to buy a property jumped from 39% in June to 52% in September.
Some 35% of people think house prices will rise in the next 12 months, while 31% believe they will fall in this period and 27% are unsure.
More than half, 57%, say that the increase in the deposit required continues to be a significant barrier when it comes to buying a home.
However, the seven increases in the bank rate since December last year, with the consequent rise in mortgage costs, have led to the affordability of mortgage repayments being selected as the biggest obstacle in the latest report, with 65% citing this, overtaking concerns about raising a deposit.
Access to a large enough mortgage was the third biggest barrier, selected by 48% of respondents.
The property tracker has revealed that people have become less confident about their ability to pay their mortgage or rent over the next six months.
The latest tracker surveyed people twice, once at the start of September before the energy price guarantee was announced and then towards the end of the month following the latest base rate increase and Chancellor Kwasi Kwarteng’s mini-budget.
In early September, 14% of homeowners and 28% of renters said they were not confident in repaying their housing costs, however, this fell to 11% and 26% respectively when consumers were asked again in late September.
BSA head of mortgage and housing policy Paul Broadhead says: “Inflation continues to rise, and we are by no means sanguine, but it’s encouraging that currently almost nine in ten home owners are not expressing concern about keeping up with their mortgage payments.”
“This is likely to be because around 80% are on fixed rates and therefore it will take time for higher mortgage costs to be felt by many. It’s not surprising that renters are less confident, with around a quarter being concerned about meeting their housing costs.”
“The current volatility in the financial markets has impacted mortgage availability and prices, but the mortgage market remains open, and borrowers will be able to re-mortgage when their fixed rate ends. It is important for people to start planning for when their current deal ends, and consider how any new deal will impact their household budgets.”
“I expect that affordability for house buyers will remain a key barrier to homeownership for some time as many will not be able to borrow the same amount in the higher interest rate environment. This may well lead to some downward pressure on house prices.”
“However, the lack of supply of properties on the market compared to the number of buyers may still continue to provide some support to prices, as will the cut to stamp duty.”
