Short-term uncertainty from the General Election result has harmed consumer confidence in the housing market, according to a report from the Building Societies Association.
The BSA says just 21 per cent of consumers say now is a good time to buy a house, down from 29 per cent in March this year.
Nearly a third of consumers (30 per cent) say it is not a good time to buy, the highest figure since December 2008 (37 per cent) and up from 24 per cent in March.
Only 16 per cent of those aged 18-24 think now is a sensible time to buy a home.
A large proportion (44 per cent) of that age group believe that house prices will continue to rise over the next 12 months, compared to 37 per cent across all ages.
Across all age groups, raising a deposit continues to be perceived as the single biggest barrier to home ownership. Sixty-seven per cent of consumers said this was one of the top three barriers to house buying.
BSA head of mortgage policy Paul Broadhead says: “Care is always needed in interpreting consumer views in the aftermath of a political event like the General Election, particularly when the result is unexpected.
“We saw a similar fall in consumer confidence after the Referendum in June last year. However, by September 2016 confidence had largely bounced back.”
Broadhead adds that while the political impact on the housing market may be short-lived, underlying economic issues were more of a challenge.
He says: “
“Whilst the political effect may be short term, some of the underlying economic fundamentals are becoming more of a challenge. Over the past year, annual CPI inflation has picked up, reaching 2.9% in May, whilst the latest earnings figures for April show that wages grew by just 1.7% in the year. This means that consumers need to spend more just to maintain their current standard of living, a significant extra pressure for those who are saving for a deposit. Mortgage rates, however, remain at historic lows and the market is highly competitive for those who do choose to purchase, whether for the first time or to move up the market.”