The latest Property Tracker survey from the Building Societies Association, reveals that consumer confidence in the housing market has slipped back after a rise following the announcement of a Stamp Duty holiday and Covid-related demand. Job insecurity looks to be the main reason for this with over two thirds of those surveyed saying a rise in unemployment is one of the biggest potential risks to the stability of the property market in 2021. However, despite concerns that unemployment is likely to rise, more than 9 in 10 of mortgage borrowers feel confident that they’ll be able to make their own mortgage payments in the next six months.

Key Results

• A decline in consumers who think now is a good time to buy a property, particularly in Wales and Scotland
• Job insecurity is seen as the biggest barrier to property purchase, with those in the East Midlands and Scotland being the most concerned about this
• Households remain confident in their own financial situation
• North / South divide on house price expectations

The latest Property Tracker results show that just over a quarter (27%) of consumers think now is a good time to buy a property, down from 37% in September. The devolved nations are the least optimistic, with less than a quarter of consumers in Scotland (22%) and Wales (23%) feeling that now is a good time to buy. This suggests the boost in property sales caused by the Stamp Duty holiday may be short lived.  

Lack of job security (65%) is seen as the main barrier to someone buying a property at the moment. Across the regions, this is most keenly felt in the East Midlands (70%) and Scotland (69%) and less so in Wales (58%) and the South West (59%). Despite this recognition that unemployment will rise, 91% of mortgage borrowers are confident in their own ability to make their monthly payments, suggesting that most people don’t think it will happen to them.

When asked about house prices, there’s a clear North/South divide. Those in the South and Midlands are more confident that prices will rise over the next 12 months, with 27% in the South and 30% in the Midlands saying they think this will be the case. This compares to 23% in the North and 20% in the East of England. The exception to this geographical divide is London, where only 23% expect house price rises, possibly reflecting reports that homeworking is driving more people to look for property in less urban areas. 

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

“Whilst confidence in buying a property has declined, the market is still dealing with the demand created by the Stamp Duty holiday and the capacity constraints in completing the surveys, valuations and searches in a Covid-secure way before the 31 March deadline.

“To help alleviate this we have proposed a tapered end to the Stamp Duty holiday to government, where those who have accepted a mortgage offer by 31 March are given an extra three months to complete the purchase, whilst still benefiting from the tax reduction. 

“Continuing with the proposed cliff edge end could potentially have a damaging impact on the property market, particularly if those whose sale doesn’t complete within the deadline walk away from the transaction.

“Looking ahead, there are significant concerns around job security and whilst households currently remain confident in their own personal finances, lenders will continue to support those who face payment difficulties, including accepting requests for mortgage payment deferrals up to 31 March 2021.”

Press contacts:

Hilary McVitty, Head of External Affairs, Tel: 07741 984042, hilary.mcvitty@bsa.org.uk

Katie Wise, External Affairs Officer, Tel: 020 7520 5904, Katie.wise@bsa.org.uk

Notes to Editors:

1. Paul Broadhead, Head of Mortgage and Housing Policy at the BSA is available for interview.  Please contact the Hilary McVitty or Katie Wise to arrange.
    
2. All figures, unless otherwise stated, are from YouGov Plc. Total sample size was 2026 adults. Fieldwork was undertaken between 27th - 30th November 2020.  The survey was carried out online. The figures have been weighted and are representative of all GB adults (aged 18+).
    
3. The Building Societies Association (BSA) represents all 43 UK building societies, as well as 6 credit unions. Building societies have total assets of over £435 billion and, together with their subsidiaries, hold residential mortgages over £338 billion, 23% of the total outstanding in the UK. They hold over £297 billion of retail deposits, accounting for 17% of all such deposits in the UK. Building societies account for 37% of all cash ISA balances. They employ approximately 42,500 full and part-time staff and operate through approximately 1,470 branches.
    
4. The full report is available for download here.