New research shows a “modest increase” in the proportion of people who think now is a good time to buy a property. However, there are still considerably more who think now still isn’t a good time to buy.
According to the latest Property Tracker survey from the Building Societies Association (BSA), almost one in five (18%) people think it is a good time to buy a new home, compared to 14% three months ago (Dec 22). More than double of that (43%) don’t think it’s a good time to buy. This increases further for first-time buyers, with 59% saying now is “not a good time to be getting on the property ladder”.
Moreover, affording monthly mortgage repayments is the biggest barrier to buying a new property, with two thirds (66%) citing this. This figure has been increasing every quarter since interest rates began rising in December 2021, when just 39% said it was an obstacle to buying a new home. Raising a deposit also remains a “key obstacle”, with more than half (57%) mentioning this.
However, house price expectations showed a slight improvement in the report, with one in four (24%) expecting prices to rise over the next 12 months, a jump from just 16% in December 2022. Regional differences are evident with almost a third (29%) of those in the West Midlands expecting prices to go up, compared to around half that number (15%) in Wales.
Overall, 40% of respondents think prices will fall in the next year, which is down from 49% three months ago.
Paul Broadhead, Head of Mortgage and Housing Policy at the BSA, said:
“It’s good to see small signs of improved sentiment in the housing market, but I expect it will be some time before we see some momentum returning to the housing market.
The significant increases in all areas of expenditure, including the rising cost of mortgages, will mean that many households’ finances will be under pressure. Affording mortgage payments and raising a deposit will therefore continue to be the main reasons preventing people from buying a new property for some time to come.”
When asked about concerns around repaying mortgages, homeowners remain positive. The vast majority (88%) of mortgage borrowers are not expressing concern about keeping up with their mortgage payments and 2% said that they are not at all confident about making their mortgage payments in the next six months.
“It’s good to see that only a very small proportion of people are particularly concerned about making their mortgage payments, with the vast majority remaining confident that they can maintain their repayments”, Broadhead said. “However, there are around 1.8 million households coming to the end of their fixed-rate mortgage this year, and most will see a significant increase in their mortgage costs. Only time will tell whether this has been factored into their financial planning.”
