• Less than one in five people think now is a good time to buy a property

• Affordability of mortgage payments is the biggest obstacle to buying a home

• Just  2% of homeowners are very concerned about paying their mortgage

An improved outlook for the UK economy is starting to see consumer sentiment in the housing market recover, if not yet their behaviour. 

The latest Property Tracker survey from the Building Societies Association (BSA) 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.

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).

But more than double that number (43%) don’t think it’s a good time to buy.  This increases further for first-time buyers, with 59% saying now’s not a good time to be getting on the property ladder.

Barriers to homeownership

Unsurprisingly, 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.

Surprising outlook in the Capital

But there is not just one housing market, and looking at the regional breakdown provides more surprising insight. Almost three-quarters (72%) of those in the South West said affordability was a barrier to buying a new property, whereas in London the number drops to 59%. 

This difference is also seen in those who think now is a good time to buy, with those in London at the highest level, at 23%. In Wales it’s just 10%. The more positive outlook in London may be due to house price growth in the Capital, has not been as strong as in the rest of the UK, and although property prices remain the highest in the country, they may seem relatively more affordable than they have in the past.

House prices

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. Again, 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.

Affordability

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. Just 2% said that they are not at all confident about making their mortgage payments in the next six months.

Commenting on the findings, 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.

“The situation is even more difficult for first-time homebuyers. They not only face the higher cost of living but this, alongside higher mortgage costs, will affect the amount they can borrow and therefore the property they are able to buy. Many will need to reassess their ambitions as they will be unable to achieve what they might have two years ago before the cost of food, fuel, energy, and interest rates started to rise. With affordability stretched, we are likely to see downward pressure on house prices this year.

“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. 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.

“Lenders are aware of the payment shock these borrowers will experience and have teams who are well trained and experienced in providing tailored support to those who may struggle.

“Our advice remains that 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. They will provide a safe space for a confidential, non-judgmental chat and will do everything possible to help each borrower with options based on their own personal circumstances.”

Ends

Press contacts:

Tanya Jackson, tanya.jackson@bsa.org.uk Tel: 07881 501098

Katie Wise, katie.wise@bsa.org.uk Tel: 020 7520 5904

Notes to Editors:

1. The Building Societies Association (BSA) represents all 43 UK building societies, as well as 7 credit unions. Building societies have total assets of nearly £500 billion and, together with their subsidiaries, hold residential mortgages of over £366 billion, 23% of the total outstanding in the UK. They hold over £342 billion of retail deposits, accounting for 18% of all such deposits in the UK. Building societies account for 41% of all cash ISA balances. They employ approximately 51,500 full and part-time staff and operate through approximately 1,288 branches.
2. For the March Property Tracker survey fieldwork was undertaken between 1-2 March 2023. The total sample size was 2099 adults.  The survey was carried out online. The figures have been weighted and are representative of all GB adults (aged 18+). All figures, unless otherwise stated, are from YouGov Plc.
3. The proportion agreeing ‘now is a good time to buy’ includes those who agree strongly and those who tend to agree, while the proportion disagreeing includes those who disagree strongly and those who tend to disagree. Respondents who answered 'don't know' are not shown, so percentages do not sum to one hundred.
4. Respondents were given the option to select up to three barriers’ when asked what they think are most likely to stop someone from buying a residential property at the moment.
5. The full Property Tracker Report can be downloaded here.
6. View Infographic here