Press release

Optimism returns to the UK housing market

26 March 2015

The future for property purchase is looking bright, with over one third (36%) of people saying that now is a good time to buy, the BSA’s March Property Tracker survey has identified.   The rebound since September is particularly marked by a substantial drop in the number of people who think now is a bad time to buy.  Taken together, the Property Tracker index has bounced back from a 9% low in September 2014 to 23%.  

Regardless of potential uncertainties such as the General Election, results show that optimism has returned to the market after the mid-2014 dip.  This coincided with the introduction of new mortgage regulations and the announcement by the Financial Policy Committee of actions to limit lending in the housing market. Results now indicate that transaction volumes may begin to slowly pick up after cooling off late last year.

Despite average wages increasing and high levels of employment, raising a deposit is the greatest barrier to buying a home. Overall, 59% of those surveyed say that this is the biggest hurdle they have to overcome, up by three percentage points on December 2014.

The future prospect of a rise in the Bank Rate is an issue for many. Over one in ten borrowers say that they would be forced to miss a payment on a bill if interest rates rose by 1% over the year ahead. A further 12% said that making loan repayments would be a constant struggle.

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

“Optimism in the housing market is back after a long, slow winter. Conditions in the mortgage market and the wider economy are improving and this confidence is driving consumer sentiment – especially those looking to purchase a home.

“Consumers and providers are also cheered by the fact that house building is starting to increase, household finances are less squeezed and inflation has fallen to 0%. Even if deflation happens - provided it is short lived and is not generated by a fall in demand in the economy - it should not be damaging.

The Financial Policy Committee will keep watching property prices and sales volumes carefully.  It, saw the need to act last year and now has a range of new tools at its disposal. A more sustainable cure for the affordability challenge is increased housebuilding.

“Earlier this month we asked for a revolution in the provision of new housing in our discussion document Housing at the Heart of Government. Like millions of others, we now await the outcome of the General Election to discover whether housing will sit at the top of the political agenda as promised.”

 

Take a look at the March Property Tracker report here.

Previous survey results can be found here.

 

 

Press contacts

Hilary McVitty

Head of External Affairs

hilary.mcvitty@bsa.org.uk

020 7520 5926

 

Notes for Editors

The Property Tracker survey is conducted quarterly by Canadean Consumer for the Building Societies Association (BSA). Figures prior to June 2012 are from YouGov Plc.  Total sample size for March 2015 was 2000 adults. Fieldwork was undertaken on 27 February - 2 March 2015. The survey was carried out online. The figures have been weighted and are representative of all GB adults (aged 18+).

* Property Tracker Index: This is net agreement with the statement “Now is a good time to buy property in the UK” calculated as the percentage agreeing to some extent, less the percentage disagreeing to some extent.