In the August/September Property Tracker report, more than 60 per cent of active buyers said concerns over the safety of their employment was the biggest barrier to home ownership, more so than the challenge of raising a deposit and the struggle to secure mortgage finance.
The unemployment rate reached 4.1 per cent in the three months to July 2020, the highest rate for two years, according to the Office for National Statistics.
An estimated 1.39 million people aged 16 and over were unemployed between May and July 2020. Unemployment is expected to rise further when the furlough scheme ends in October.
Sarah Coles, personal finance analyst, Hargreaves Lansdown, said: “Unfortunately, the property market is heading for the rocks, and job losses could strike the first blow. For the second quarter running, job insecurity is the biggest barrier people see to buying. This is the first time it has been such a worry since the aftermath of the financial crisis.
“The furlough scheme has effectively put job losses into slow motion since March, but as it winds up and redundancies accelerate, insecurity will spread across the workforce. This could be the tipping point for confidence in the housing market.”
Just a quarter of house hunters surveyed by the BSA cited fears of house prices falling in the future as a reason to hold off buying a home.
Optimism about house prices rising in the next 12 months outweighed those who said they expected prices to drop. More than 30 per cent of people surveyed said they thought house prices would rise, compared to 26 per cent who said they believed they would fall.
Paul Broadhead, head of mortgages and housing at the BSA, said: “Looking ahead, the volume of consumers going from a payment deferral back to normal payments is encouraging.
“However, we are not in normal times and forecasts of rising unemployment and the imminent end of government support schemes mean that lenders are rightly focused on risk and affordability. Whilst very definitely open for business, responsible lending is the watchword as we navigate the next six to 12 months.”