Confidence in house market drops

And those entering market heavily are reliant on parents for finance

The proportion of people who believe now is a good time to buy a home has declined in the past three months.

Just over a fifth (21%) of people think now is a good time to buy a property, down from a quarter (26%) when similar research was carried out three months ago, according to the Building Societies Association’s (BSA) “property tracker” research.

Nearly a third (30%) of people do not think that now is a good time to buy, according to the latest findings.

The decline in sentiment is likely to be due to several factors, including the end of the stamp duty holiday in England and Northern Ireland in September, a lack of properties on the market and the emergence of the Omicron variant of Covid-19, the BSA suggested.

It added that with house prices having increased by around 10% in the past year, nearly half (45%) of people expect prices to continue to rise, with just 13%

expecting a fall.

Although mortgage rates are at historically low levels, supporting affordability, rising house prices are making raising a deposit increasingly difficult, it added.

The BSA also found that 41% of parents expect to give children money towards buying a home, but only 24% of first-time buyers are expecting some cash.

Paul Broadhead, head of mortgage and housing policy at the BSA, said: “With house prices rising considerably more than inflation and wage growth, it’s not surprising that first-time buyers find raising a deposit the most difficult aspect of getting on the property ladder and something it is hard to keep pace with.

“But it’ s clear that many families are more willing to share their wealth and give financial help than the younger generation appreciate.

“Perhaps families should use the festive period to talk candidly to each other about their future plans and aspirations and how best to use their intergenerational wealth.”

In a separate survey, nearly two-thirds (64%) of parents whose adult children own a home contributed towards a deposit, it was found.

On average, parents contributed £32,440, with many saying their children would not have been able to get on the property ladder without their support, according to Zoopla.

An additional 10% of parents said that, while they did not contribute, other family members did.

One in seven (14%) parents said they gave their adult children more than £50,000 towards their home.

Just over one in 10(11%) paid the entire deposit.

And 3% of parents with children over the age of 18 plan to give their children money towards a deposit for a home for Christmas this year, the survey of more than 1,000 parents with adult children found.

House prices have surged to record highs during 2021, with UK housing market activity likely to be at its busiest this year since at least 2007, according to industry experts.

Low mortgage rates have helped to keep monthly repayments relatively affordable for home buyers.

Daniel Copley, a consumer expert at Zoopla, said: “Those who managed to ‘go it alone’ and purchase a home without parental support are very much in the minority and the transfer of intergenerational housing wealth is key.”