Removing Brexit uncertainty won’t resolve housing market issues
The housing crisis and the political turmoil are unsettling homeowners and making them less likely to want to move, says BSA.
Released today, the BSA’s quarterly Property Tracker survey reveals that house prices are of greater importance than Brexit when it comes to housing market sentiment.
Respondents who disagreed that ‘now is a good time to buy’ were asked what would change their mind: over a third (34%) said a correction in house prices.
Comparatively, 27% said ‘the UK reaching an agreement with the EU’ would make them more positive, and just 11% said a ‘no deal’ scenario would make them more positive.
Sentiment towards the housing market has been negative for over two-years, but improved in June.
When asked ‘is now a good time to buy a property in the UK’, those who disagree has outnumbered those who agree in every quarter since June 2017.
Today’s results show that 23% agreed that now is a good time to buy, 28% disagreed. This is slightly less negative than in March when a third (33%) disagreed.
Almost a third (31%) of people expect house prices to increase in the next year. Less than a quarter (24%) think prices will fall. This could be due to fewer properties coming onto the market following the EU referendum, adding support to prices.
Higher property prices will make saving for a deposit even more difficult for aspiring first-time buyers. ‘Raising a deposit’ has been the single biggest barrier to home ownership for nearly a decade. In today’s results 64% of people said raising a deposit was the biggest barrier.
Paul Broadhead, Head of Mortgages and Housing Policy at the BSA comments:
“It’s no surprise that the UK views the housing market in a negative light. We are in the midst of a housing crisis and the political landscape is in undoubtable turmoil. Naturally, these combined forces are unsettling homeowners and making them less likely to want to move. Fewer homes on the market means intensified competition, which consequentially push house prices up. Unfortunately, this has a knock-on effect on first-time buyers, who are already struggling to pull together a deposit.
“This cocktail of existing homeowners staying put, and would-be first-time buyers failing to get on the ladder at all, means we risk stagnating the housing market further. To aid this, financial service providers could help educate people of the benefits of saving little and often.
“Consumers are encouraged to take advantage of Government initiatives such as the Help to Buy ISA and the Lifetime ISA, which are designed to maximise savings for a house deposit. The former is closing to new accounts at the end of November.”