• Only one in seven people think now is a good time to buy a house

• Keeping up with repayments, raising a deposit and access to a large enough mortgage are the biggest obstacles to homeownership

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 from the Building Societies Association (BSA), shows 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, giving a net rating of -33%, one of the lowest levels of confidence we have seen since the measure began almost 15 years ago.

Is now a good time to buy?

Whether people bide their time before buying, or bite the bullet and go for it, differs across the country. 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 ten (9%) are now worried about the value of their home falling.

Repayments, deposits and bigger mortgages

The relentless rise in the Bank Rate over the last year, with nine consecutive increases subsequently leading to higher mortgage rates, has 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.

Affordability concerns – Homeowners versus Renters

Asked what people are worried about over 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 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. However, renters are less confident, with around a quarter (23%) expressing concern about meeting their housing costs.

Commenting on the findings, Paul Broadhead, Head of Mortgage and Housing Policy at the BSA said:

“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.

It's encouraging that almost nine in ten 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. 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.

Whilst the indicators suggest low confidence in the housing market, there is not ‘one market’ and the impacts will be felt differently depending on individual’s circumstances, whether they are regional or personal. In general, there still remains an imbalance between the supply and demand for properties across most areas of the UK, which I expect will keep the market moving, albeit at a slower pace than we’ve seen recently.

Finally, it’s worth noting that lenders are sensitive to the rising number of people facing a squeezed household budget and have teams who are well trained and experienced in providing tailored support to those who are struggling. Anyone who is worried about their finances and ability to pay their mortgage should therefore 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

Appendix

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 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 December Property Tracker survey fieldwork was undertaken between 1-2 December 2022. Total sample size was 2057 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