The latest Property Tracker survey from the Building Societies Association (BSA) showed just 15 per cent of people believe now is a good time to buy a home, compared to 26 per cent a year ago.
This sentiment varies across the UK, with a fifth of people in both London and the North East believing that now is the time to buy. In Scotland, just 11 per cent of people feel the same.
Those who said it is not currently the right time to purchase a property rose from 39 per cent in June to 52 per cent in September.
Notably, the proportion of people who believe house prices will rise over the next year was almost equivalent to those who believe values will fall with a 35 per cent versus 31 per cent split.
Affordability woes
The ability to afford mortgage repayments was the biggest concern for respondents, as 65 per cent cited this as their main barrier. This has overtaken the dilemma of raising a sufficient deposit, despite rising house prices, which was cited as a worry by 57 per cent of people.
Being able to access a large enough mortgage was an issue for 48 per cent of respondents.
Overall, people are feeling less confident about being able to pay their mortgage or rent over the next six months, the survey revealed.
Paul Broadhead, head of mortgage and housing policy at the BSA said: “I expect that affordability for house buyers will remain a key barrier to homeownership for some time as many will not be able to borrow the same amount in the higher interest rate environment. This may well lead to some downward pressure on house prices.
“However, the lack of supply of properties on the market compared to the number of buyers may still continue to provide some support to prices, as will the cut to stamp duty.”
Confidence in government policy
The BSA surveyed people at the start of September, before the Energy Price Guarantee was announced, then again on 26 and 27 September following the bank rate increase and the mini Budget.
At the beginning of the month, 14 per cent of homeowners and 28 per cent of renters said they were not confident about repaying their housing costs. This dropped to 11 per cent and 26 per cent respectively at the end of September.
The BSA said this signalled a positive impact of the tax cuts and energy price cap on consumer confidence.
Fixed rate protection
Broadhead added: “Inflation continues to rise, and we are by no means sanguine, but it’s encouraging that currently almost nine in 10 homeowners are not expressing concern about keeping up with their mortgage payments. This is likely to be because around 80 per cent are on fixed rates and therefore it will take time for higher mortgage costs to be felt by many. It’s not surprising that renters are less confident, with around a quarter being concerned about meeting their housing costs.
“The current volatility in the financial markets has impacted mortgage availability and prices, but the mortgage market remains open, and borrowers will be able to remortgage when their fixed rate ends. It is important for people to start planning for when their current deal ends, and consider how any new deal will impact their household budgets.”
