Fewer than one in five people in the UK believe it’s a good time to buy a home, according to the latest Property Tracker survey from the Building Societies Association (BSA).
The data from the BSA, which represents all building societies and mutual-owned banks in the UK, reveals that just 17% of respondents agree that now is a good time to buy a property, down from 20% in January.
Despite recent cuts in mortgage rates, affordability of mortgage payments remains the key preventative factor, cited by 61% of current homeowners and 65% of prospective first-time buyers. Raising the required deposit also presents a significant obstacle to home ownership, at 59% and 62% respectively.
Paul Broadhead, head of mortgage and housing policy at the BSA, commented:
“The biggest concern from the latest Property Tracker results is the clarity it provides on the affordability issues faced by first-time buyers. Many feel that the dream of homeownership is clearly nothing more than that, a dream, particularly those not fortunate enough to have family who can provide financial support.”
The third biggest barrier for aspiring homeowners according to the BSA data is access to a large enough mortgage. Almost half of all first-time buyers (42%) said this was a hurdle to home ownership. Around a third of respondents said stamp duty presented a barrier to buying a home, up from just one in five in January.
Broadhead added:
“It’s not surprising that sentiment in the housing market has declined overall, with the recent changes to stamp duty meaning pretty much every house purchaser will now pay more. But for first-time buyers the extra stamp duty tax which they now need to pay is substantial and increases the already significant burden of raising the upfront costs required to buy a home.”
The number of people claiming job security prevented them from buying a home has also risen over the last six months, with 26% of respondents citing it as a factor now, compared to 21% in September last year. With industry Q1 property reports also finding ongoing challenging conditions for renters, Broadhead suggests government intervention is necessary to help would-be buyers get into the housing market.
He said:
“A thriving housing market needs first-time buyers to be able to get on the property ladder. But the prospects for many of today’s would-be first-time buyers looks increasingly challenging.
“A further bank rate cut when the MPC meets in a couple of weeks should help to improve sentiment in the housing market, but to have a meaningful impact radical changes are required.
“A starting point must be improving the balance between housing supply and demand. The government has set an ambitious target for building more homes, with some bold statements on planning processes. But we now need action not words – more homes which are more affordable and more appropriate to the needs of those living in them.”
