Barriers to home ownership fall as housing market sentiment improves

UK CONSUMERS have reported that all the major barriers to property purchase have fallen, the BSA’s final Property Tracker of 2015 reveals.

Raising a deposit - the single biggest barrier since 2010 - is now at its lowest level for six years. However, it still presents a barrier to more than half of consumers with 52 per cent saying it is a hurdle to overcome. This is down from 59 per cent in September 2015 and the high of 69 per cent in September 2011.

From September to December 2015, access to mortgage finance as a barrier to home ownership dropped from 41 per cent to 38 per cent. The affordability of monthly mortgage repayments fell from 35 per cent to 33 per cent and lack of job security is now at 26 per cent, down from 28 per cent.

The results indicate that people are feeling reasonably confident about home ownership as an option for them. This could partially be as a result of the focus on housing in the Autumn Statement in November and is evidenced by the strong lending by building societies and other lenders across the market this year.

Paul Broadhead, BSA head of mortgage policy, said: ‘ This snapshot of sentiment in the housing market shows that consumers are feeling reasonably optimistic about getting on or moving up the property ladder. Awareness of Government schemes, such as Help to Buy and the new Help to Buy, London plus the availability of higher loan-to-value mortgages helps to bring choice and competition to the market. Housing generally needs to remain a top priority for the Government.

‘Now is the time to focus on building more homes, supported by appropriate investment in infrastructure, in order to begin to address the long term imbalance of housing supply with demand.

‘ Innovative mortgage products and intermediate forms of tenure must also be championed – not just by building societies – but by all lenders, the regulators and government. This will go some way to delivering a sustainable housing market which caters to the needs of a wide range of credit worthy consumers, not just those with ‘vanilla’ borrowing requirements.’