Nearly one in three (29%) people who want to buy a home believe they will never be able to, according to new research from the Building Societies Association (BSA).
The BSA’s latest property tracker survey suggests millions of would-be buyers have resigned to a lifetime of renting, blaming affordability challenges.
Six in ten (58%) first-time buyers surveyed said raising a deposit is the main obstacle, with more than half (54%) claiming the cost of monthly mortgage repayments would be too high. Just under half of the respondents (47%) believe not being able to borrow enough is the major barrier to buying a home.
The representative survey of 2,088 adults also identified new trends in barriers to homebuying: a quarter (26%) said stamp duty tax prevented them from buying a home, up from 7% three years ago.
‘With property tax reform reportedly under consideration in the forthcoming budget, speculation can stall transactions as buyers and sellers wait to see what happens, undermining confidence and momentum in the market’, the BSA said.
Frustration with the complexity of the homebuying process is at its highest level, with 14% now viewing it as a major barrier – up from 10% in July.
‘This coincides with the Government’s consultation on reforming the home buying and selling process’, the BSA added.
“The proposals have the potential to make buying and moving home simpler, quicker and less stressful, and it’s clear that this is needed to modernise and build confidence, particularly amongst first-time buyers.”
Sentiment in the housing market remains cautious, with less than one in five (17%) people thinking now is a good time to buy, compared with a third (33%) who disagree. The net confidence score of -16% represents a modest improvement, up from -21% in the BSA’s summer survey.
‘For too many people, the dream of owning a home has turned into a sense of defeat’, said Paul Broadhead, the BSA’s head of mortgage and housing policy.
“The financial barriers are well known, but it’s clear that policy uncertainty and the complexity of the process are now part of the problem too.
“Speculation about changes to property taxes may grab headlines, but it risks damaging confidence and creating unnecessary volatility. What buyers need most is stability, not stop-start interventions that distort the market.
“Building societies are working hard to support first-time buyers with flexible lending options and innovative mortgage offers. But lasting change requires a joined-up approach that focuses on housing supply, simplifies the buying process and creates the confidence that homeownership is achievable again.
“If we get that right, the future of the housing market can be a much brighter prospect for the next generation.”
The BSA represents all 42 UK building societies, including both mutual-owned banks, as well as seven= of the largest credit unions. Building societies and mutual-owned banks hold residential mortgages of over £485 billion, 29% of the total outstanding in the UK.
