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Property Tracker survey shows housing market sentiment continues to fall

Building Societies Association

4 min read Partner content

·Less than one in six people think now is a good time to buy a house

·Affordability of mortgage repayments is the biggest barrier to buying a home

The latest Property Tracker survey from the Building Societies Association (BSA), shows a decline in consumer confidence in the housing market, with just 15% of people thinking now is a good time to buy a property, down from 26% a year ago.

It’s not however the same picture across the whole country, as there are some significant regional difference: one in five people in London (19%) and the North East (19%) agreeing now is a good time to buy, compared around half that number (11%) in Scotland.

Those disagreeing that now is a good time to buy a property jumped from 39% in June to 52% in September.

Interestingly, a similar number of people think that house prices will rise in the next 12 months (35%) as those who think they will fall in this period (31%) with over a quarter (27%) unsure, demonstrating the general market uncertainty.

Barriers to buying a home

The double-digit growth we’ve seen in house prices in the last year means raising the deposit required to buy a home continues to be a significant barrier, with over half (57%) saying this was blocking them.

However, the seven increases in the Bank Rate since December 2021, with the consequent rise in mortgage costs, has 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 almost half the respondents (48%).

Affordability concerns

Over the last year, Property Tracker has revealed that people have become less confident about their ability to pay their mortgage or rent over the next six months.

This month we have surveyed people twice, at the start of September before the Energy Price Guarantee was announced and then again towards the end of the month (26-27 September), following the latest Bank Rate increase and the Chancellor’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. This shows some positive impact the tax cuts and energy price cap announcements have had on consumers’ confidence in their financial position.

Commenting on the findings, Paul Broadhead, Head of Mortgage and Housing Policy at the BSA said:

“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.

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