Confidence dropping out of housing market
JUST one in seven people thinks now is a good time to buy a house – one of the lowest confidence ratings recorded by building societies in nearly 15 years.
While 14% of people think now is a good time to buy a property, 47% do not think now is a good time to purchase a home, the Building Societies Association (BSA) found.
Weighing these two figures up against each other, this gave a net confidence rating of minus 33% of people believing now is a good time to buy a home – which the BSA said is one of the lowest levels of confidence it has seen since its records started nearly 15 years ago.
High house prices, rising mortgage rates and rapidly increasing essential living costs are among the factors dragging on market confidence, the BSA said.
There has been a big shift in the proportion of people expecting prices to fall in the next 12 months.
Nearly half (49%) of people believe house prices will fall in the coming year, up from 35% who thought this in September. Some 16% of people now think house prices will rise, down from 31% who thought this three months ago.
In what could also have wider impacts for consumer confidence beyond the housing market, nearly one in 10 (9%) people are worried about the value of their home falling.
Mortgage affordability was viewed
as the biggest barrier to buying a property, with raising a deposit and access to a big enough home loan also among the most widespread concerns, the December property tracker survey of more than 2,000 people found.
The research also found that nearly a quarter (23%) of renters are concerned about meeting their housing costs in the next six months.
Paul Broadhead, head of mortgage and housing policy at the BSA, said:
“Whilst several house price measures are now showing modest price falls, the significant increases over the last two years, alongside the spiralling cost of food, fuel and energy, means mortgage affordability for those wishing to buy a property is likely to be more difficult now than it was 12 months ago.
“I expect this, and raising a deposit, will remain key barriers to homeownership for some time to come, with many potentially having to lower their ambitions on the property they can consider buying.”
He added that lenders are sensitive to the rising number of people facing a squeezed household budget and have teams who are trained and experienced in providing tailored support to those who are struggling.
Anyone who is worried about their finances and ability to pay their mortgage should get in touch with their lender or a debt adviser as soon as possible, the BSA said.