Optimism has returned to the housing market with the latest data revealing that over a third of people agree that now is a good time to buy a property in the UK.
According to the latest market analysis from the Building Societies Association, there has been a notable surge in consumer confidence in the housing market following the Budget earlier this month with just 17% disagreeing that now is a good time to buy, down from 23% in December.
Expectations of a rise in house prices are also growing, with 39% anticipating an increase over the next 12 months, a big jump from 25% three months ago.
The Chancellor’s Budget announcements earlier this month seem to have stimulated the boost in confidence. 59% of first-time buyers said the mortgage guarantee scheme, which requires just a 5% deposit, has made them feel more positive about buying a property in the UK. The extension to the stamp duty holiday has also led to 40% of people feeling more positive about buying a property, with the furlough extension building confidence in buying a property for a third of people (33%).
In the midst of the Covid pandemic, lack of job security has been perceived as the biggest barrier to buying property and it remains so at 59%, however, it is steadily declining as a reason for not purchasing (Dec 2020 - 65%; Sept 2020 - 68%).
Despite an overall increase in optimism, there are regional differences.
In Wales, 48% of the people are expecting house prices to rise in the next 12 months, compared to a third (33%) in London and the East Midlands. 45% of the people In the North East think now is a good time to buy a property, with less than a third (29%) agreeing in Scotland.
Lack of job security as a barrier to buying a property at 59% belies a north/south divide, with 65% in Yorkshire and Humberside citing this as a barrier, compared to just 50% of those in London.
Paul Broadhead, Head of Mortgage and Housing Policy at the BSA, comments: “It’s great to see public confidence in the housing market returning. The vaccination rollout and the publication of the Government roadmap for easing Covid-19 restrictions are likely to have impacted this, but it’s also clear that some measures announced in the Budget, including the government-backed mortgage guarantee for those with small deposits and the stamp duty holiday extension, have been significant contributors to the growing optimism.
“The extension to the furlough scheme has also stimulated confidence and it’s good to see that many people are no longer citing losing their jobs as a barrier to purchasing a home. We should however be mindful that the full impact the Covid-19 pandemic will have on the economy is still unclear and there’s strong evidence that the effect on household finances varies considerably, with those on lower incomes most negatively impacted.
“With the latest forecast from the Office for Budget Responsibility suggesting the unemployment rate will reach 6.5% this year, and many people still benefiting from mortgage payment deferrals, the overall figures may conceal those who are struggling financially and are feeling less optimistic about the future.”
Source:- https://www.propertyreporter.co.uk/property/confidence-returns-to-the-housing-market-following-budget.html