The survey found there is low consumer confidence in the housing market, with just 14% of people thinking now is a good time to buy a property, compared to 47% who think it isn’t a good time
The combination of high house prices, rising mortgage rates, rapidly increasing essential living costs and political turmoil has seen confidence in the housing market close to a record low, the latest Property Tracker survey by the Building Societies Association (BSA) reveals.
The survey found there is low consumer confidence in the housing market, with just 14% of people thinking now is a good time to buy a property, compared to 47% who think it isn’t a good time.
This provides a net rating of -33%, one of the lowest levels of confidence the BSA has seen since the measure began almost 15 years ago.
Meanwhile, one in five (19%) people in London agree now is a good time to buy a property, compared to around half that number in Yorkshire and the Humber (8%) and the North East (10%).
There has been a significant shift in the number of people who think that house prices will fall in the next 12 months compared to last quarter, up from 35% in September to almost half (49%) this month.
Only 16% thought house prices would rise, compared to almost double that number (31%) three months ago. Indeed, one in 10 (9%) are now worried about the value of their home falling.
BSA says the nine consecutive increases in the Bank of England base rate have resulted in the affordability of mortgage repayments being selected as the biggest obstacle to buying a property.
Two thirds (66%) of people cite this as a barrier, with over half (53%) saying concerns about raising a deposit was blocking them.
Access to a large enough mortgage is the third biggest barrier, selected by almost half (45%) of the respondents.
Looking at people’s concerns for the next six months, one in seven (70%) said rising energy prices and 63% said the rising cost of food.
Homeowners were more concerned about rising energy prices (73%) than those who don’t own their own home (66%).
When asked about the affordability of monthly mortgage or rent payments over the next six months, the vast majority (87%) of mortgage borrowers are not expressing concern about keeping up with their mortgage payments.
BSA head of mortgage and housing policy Paul Broadhead says: 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 said.
It’s encouraging that almost nine in 10 homeowners are not expressing concern about keeping up with their mortgage repayments, and we’ve not yet seen any increase in borrowers with mortgage arrears, he said.
He said: This is likely to be because around 80% are on fixed rates meaning it will take time for higher mortgage costs to be felt by many. This will not be the case for renters and therefore it’s not surprising that they are less confident about meeting their housing costs.
