Confidence in housing market continues to be negative: BSA

The Building Societies Association reports that public confidence in making a home purchase was at minus 4 per cent in September, down from the minus 1 per cent recorded in June.

This marks the sixth consecutive quarter that the net agreement to the question “is now a good time to buy property in the UK?” has been negative.

Asking why this is so, concerns over monthly mortgage repayments was up from 44 per cent in June to 48 per cent this month, with raising a deposit and access to a mortgage both falling, from 68 per cent to 65 per cent, and 51 per cent to 46 per cent, respectively.

Worries over lack of job security was flat at 34 per cent.

Building Societies Association head of mortgage and housing policy Paul Broadhead says: “Consumer negativity on home purchase is borne out by a mortgage market which remains subdued. The only area of mortgage lending which has seen any growth this year is the re-mortgage market. This has been in part driven by borrowers looking to fix their mortgage rates as bank rate rises.  Now there is evidence that fixed rate periods are starting to rise with borrowers looking to secure their repayments before the bank rate rises again.

“Uncertainty about Brexit – deal or no deal – is dampening the volume of property purchases, with many of those who can delay doing so. High house prices in some regions are still a huge issue, especially for first time buyers, and more than a third of consumers (36 per cent) still believe that prices will rise in the next 12 months. That should be set against [the] 22 per cent who believe that they will fall.”

Broadhead also talks about the much-talked about future of Help to Buy that has excited so much industry comment: “The fate of this scheme after 2021 was always going to be difficult, but in my view it should not become a permanent part of the market. Tapering it down could be one option. When Help to Buy (Scotland) was launched in 2013, it had a price cap of £400,000, this has been reduced £230,000 allowing more people to benefit from the available funding and targeting it at lower income families and first-time buyers. Another option could be to reduce the equity loan available from 20 per cent to a lower amount.

“To sensibly manage the change, investors, lenders, developers, mortgage intermediaries and of course consumers, will all need time to adapt to a world without direct government support. Now would be the time for the government to make its intentions for the future of Help to Buy: Equity Loan crystal clear.”

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