The Property Tracker report from the Building Societies Association (BSA) showed that mortgage affordability was seen as a barrier to homebuying, according to 62 per cent of respondents, compared to 71 per cent of people in September 2023.
The BSA said this likely reflected the fall in average mortgage rates since autumn.
Despite this smaller proportion of people citing affordability as a barrier, this was still the main obstacle among consumers.
Homeowner affordability worries soothed
Affordability was also less of a worry for homeowners, with just nine per cent saying they were either not very confident or not at all confident about paying their mortgage over the next six months. This was a slight reduction on the 12 per cent who felt this way in December, and the lowest level of concern for nearly two years.
This is also despite a recorded rise in mortgage arrears in Q4 2023.
The share of people who said they had no anxiety about keeping up with mortgage payments rose from 85 per cent to 90 per cent over the same period.
In comparison, 74 per cent of renters are confident about making monthly payments, the highest score of confidence since March 2022. The share of people who were not feeling confident about paying rent fell slightly from 20 per cent in December to 18 per cent in March.
Looking ahead, 41 per cent of people think house prices will go up in the next 12 months, markedly higher than the third who felt the same in December. This is the highest proportion since June 2022.
Just 14 per cent think house prices will fall over the year, down from 24 per cent in December.
Falling rates creating confidence
Paul Broadhead (pictured), head of mortgage and housing policy at the BSA, said: “The overall reduction in mortgage rates following the peak in 2023 has been welcomed by homebuyers, and has seen an improvement in confidence in the housing market.
“While consumer prices remain high, wage growth has been strong, meaning many households are now in a stronger position than six months ago. There is also an expectation that if inflation continues to fall, the bank rate may be cut this year, further easing pressures on borrowers and increasing mortgage affordability.”
Broadhead added: “Whilst affordability of mortgage payments remains the biggest barrier to house purchase, it is reassuring that this has reduced over the past six months. Expectations around house prices reflect this more stable outlook for the housing market.
“Whilst there has been a welcome reduction in those that are concerned about meeting their mortgage payments, lenders remain very aware that there are a number of homeowners who are struggling. They are ready to help and well-equipped to offer tailored support to anyone who may be struggling, and would encourage anyone with concerns to contact them as soon as possible.”
