Press release

Housing market sentiment negative for 4th consecutive quarter  

Housing-shelter-negative-sentiment-box-cover.jpgThe weak economic outlook and continued uncertainty about the impact of the UK’s exit from the EU are factors driving negative consumer sentiment about the housing market for a 4th consecutive quarter across Britain. 

In research which has been carried out every quarter since June 2008, 2,000 consumers are asked a range of questions including whether now is a good time to buy a property or not.

The index turned negative for the first time since the financial crisis in June 2017 and has remained negative in September, December and now March 2018.  It shows that more people are negative than positive about buying a new home.    

Home Purchase Index   

June 2008

-25

September 2008

-14

Average December 2008 – December 2015

+20

March 2016

+19

June 2016

+1

September 2016

+10

December 2016

+5

March 2017

+5

June 2017

-10

September 2017

-3

December 2017

-6

March 2018

-3

 Table 1

The survey also asks consumers to identify the more practical barriers that are holding them back from buying.  Since December 2008 the single biggest barrier has consistently been the challenge of raising a deposit.  Since March 2016 this has been a barrier identified by 60% or more of consumers, in March 2018 68% of consumers identify raising a deposit as their biggest barrier to home ownership.

The survey also tracks whether the requirement to pay Stamp Duty is a barrier.  The results give an indication that either first time buyers are unaware of the exemption from stamp duty for many of them in November 2017; do not see the benefit of it as the Government had hoped; or more probably,  that after the publicity the change received after the Budget it is no longer at the forefront of consumer’s minds.   Whatever the reason it is not considered to be a substantial barrier by consumers.    

 

All adults %

(GB)

First time buyers only %

(GB)

September 2017

15%

6%

December 2017

10%

4%

March 2018

15%

9%

Table 2

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

“The UK is experiencing period of uncertainty and this is having an adverse effect on consumer sentiment and behaviour in the housing market.  The concerns that consumers have are clear from a housing index that has remained negative for four quarters.  How consumers are behaving can in part be demonstrated by the 6-year high in re-mortgage lending reported by the Bank of England for January 2018¹ and February figures from RICS² which showed listings and new buyer enquiries drifting lower in some regions, particularly London and the South East.   

“Whilst housing market activity is likely to remain muted for the remainder of 2018 there is good news for would-be home buyers as house prices start to cool in some places across the country.  Mortgage finance remains readily available and fierce competition amongst lenders is good for consumers.  If the Bank Rate rises as anticipated by a further 0.25% in May, it will still remain historically low.” 

 

Press Office contacts

Hilary McVitty Tel: 0207 520 5926

Amy Harland Tel: 0207 520 5927

Out of hours: 07507 837 326

 

Notes for Editors

¹Figures issued by The Bank of England on 26 March 2018 for January 2018 showed the highest monthly value of re-mortgage activity for the past 6 years at £10.4 billion.

² RICS February UK Residential Market Survey issued on 8 March 2018

  • More information and graphics from the BSA Property Tracker Survey
  • Table 1:  Figures June 2008 – March 2012 provided by YouGov Plc, Figures June 2012 – March 2016 provided by Canadean Consumer, Figures June 2016 – March 2018 provided by YouGov Plc, Average calculated by the BSA.
  • Table 2: Figures are from YouGov Plc. Research came from three separate surveys:
  • 1– 4 September 2017. Total sample size was 2,027 adults
  • 1– 4 December 2018. Total sample size was 2,157
  • 2– 5 March 2018. Total sample size was 2,000
  • These surveys have been carried out online. The figures have been weighted and are representative of all GB adults (aged 18+)
  • Home Purchase Index – respondents are asked whether now is a good time to buy a property.  The index is the difference between those who are positive and those who are negative. 
  • The Building Societies Association (BSA) represents all 44 UK building societies which between them serve 23 million members.
  • As at 31/12/17: Building societies have total assets of over £387 billion and, together with their subsidiaries, hold residential mortgages of over £298 billion, 22% of the total outstanding in the UK.
  • They hold over £268 billion of retail deposits, accounting for 18% of all such deposits in the UK. Building societies account for 35% of all cash ISA balances.
  • Societies employ approximately 40,000 full and part-time staff and operate through around 1,550 branches in addition to digital channels.

Regional figures

Home Purchase Index  

 

March 2018

March 2017

Britain as a whole

-3

+5

London

-13

-19

South East

- 8

+16

East of England

 0

-6

South West

-3

+10

East Midlands

-2

+14

West Midlands

+4

+16

Yorkshire & Humberside

 0

+3

North West

+13

+17

North East

-11

+11

Wales

-9

+5

Scotland

+2

-3

Survey for March 2017 was conducted by YouGov Plc between 1-2 March.  Total sample size 2,021 adults. Methodology as per Table 2.