Confidence in the housing market is close to rock bottom as buyers think is it is not a good time to make a property purchase, a new report reveals.

A combination of high house prices, rising mortgage rates, rapidly increasing essential living costs and political turmoil have led to this situation, according to the report by the Building Societies Association.

Only 14 per cent of respondents to its survey thought that now is a good time to buy a property – compared to 47 per cent who think that it isn’t a good time, giving a net rating of -33 per cent.

It is one of the lowest levels of confidence that the association has seen since its records began almost 15 years ago.

High house prices, rising mortgage rates, rapidly increasing essential living costs and political turmoil have led to low confidence in the property market, says new report

High house prices, rising mortgage rates, rapidly increasing essential living costs and political turmoil have led to low confidence in the property market, says new report

Views about whether now is a good time to buy vary across the country, with one in five – at 19 per cent – in London believing now is a good time to buy.

It compares to around half of that number – at 8 per cent – in Yorkshire and the Humber, and 10 per cent in the North East.

There has also 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.

Numbers have increased from 35 per cent in September to almost half this month – at 49 per cent.

Only 16 per cent thought house prices would rise, compared to almost double that number at 31 per cent three months ago. And 9 per cent are now worried about the value of their home falling.

The biggest obstacle to buying a property is the affordability of mortgage repayments, the study went on to reveal.

Mortgage rates have increased following several rises in interest rates by the Bank of England, which now stand at 3.5 per cent 

Two-thirds of people cite this as a barrier, with a total of 53 per cent saying concerns about raising a deposit was blocking them.

Access to a large enough mortgage is the third largest barrier, and was picked by almost half of the respondents.

Borrowers can check how much a mortgage would cost them now based on loan size and house value, with our best mortgage rates calculator

Mortgage rates have increased following several rises in interest rates by the Bank of England, which now stand at 3.5 per cent

Mortgage rates have increased following several rises in interest rates by the Bank of England, which now stand at 3.5 per cent

Asked what people are worried about over the next six months, one in seven said rising energy prices and 63 per cent said the rising cost of food.

Homeowners were more concerned about rising energy prices – at 73 per cent – than those who don’t own their own home – at 66 per cent.

When asked about affordability of monthly mortgage or rent payments over the next six months, the vast majority – at 87 per cent – of mortgage borrowers are not concerned about keeping up with their mortgage payments.

However, tenants are less confident, with around a quarter – at 23 per cent – concerned about meeting their housing costs.

It comes at a time when the latest data shows house prices are beginning to fall.

Halifax said that UK house prices fell by 2.3% between October and November

Halifax said that UK house prices fell by 2.3% between October and November 

Earlier this month, Halifax reported annual house price growth slowed dramatically in November to just 4.7 per cent, down from 8.2 per cent in the 12 months to October.

Month to month house prices also fell by 2.3 per cent, compared to 0.4 per cent last month, according to Halifax. The change means that the average house in Britain now costs £285,579, down £6,827 from £292,406 last month.

Paul Broadhead, of the BSA, said: ‘While 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.’

Could house prices fall 20% 

The mortgage crunch has stalled the pandemic property boom and sent house prices down, but could they fall 20 per cent? 

The risk of a severe house price downturn of that magnitude was flagged by Rightmove founder and property market veteran Harry Hill.

On this week’s Georgie Frost and Simon Lambert discuss the prospects for the housing market, how the rapid rise in mortgage rates is affecting it and what prospective home movers or first-time buyers should do. 

Press play to listen to the episode on the player above, or listen (and please subscribe and review us if you like the podcast) at Apple Podcasts,  Audioboom, YouTube and Spotify or visit our This is Money Podcast page.     

Broadhead added: ‘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 per cent 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.

‘While 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.’



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