Housing Market Sentiment Takes a Hit as Affordability Concerns Persist

As the cost of living continues to rise, the UK’s housing market is feeling the strain. According to the latest report from the Building Societies Association (BSA), high house prices and mortgage rates are making it increasingly difficult for first-time buyers and those looking to re-mortgage or move home.

House prices continue to rise, making it difficult for first-time buyers to get on the ladder.

The BSA’s June property tracker report reveals that a staggering 56% of people believe the deposit required to buy a home is too high, with this figure increasing to 63% for first-time buyers. To put this into perspective, a typical first-time buyer now needs a deposit of around £60,000, a 160% increase from the average £23,000 required in 2005.

The deposit required to buy a home continues to rise, making it difficult for first-time buyers.

Meanwhile, 68% of people cite the affordability of monthly mortgage repayments as a growing barrier to buying a home, an increase from 62% in March. A similar number (65%) find raising a deposit an obstacle, up from 60% in March.

Mortgage repayments continue to be a significant barrier to buying a home.

While earlier this year many expected a cut to the base rate this summer, the BSA suggests this is now looking unlikely. This could mean that mortgage affordability does not start to ease, as had been anticipated.

Interest rates continue to rise, making it difficult for first-time buyers to get on the ladder.

Despite these challenges, mortgage arrears levels have so far remained low, with the majority of people (88%) not expressing concern about keeping up with their mortgage payments. However, a small minority are not confident about making their mortgage payments over the next six months.

Mortgage arrears levels remain low, but a small minority are not confident about making their payments.

In total, 10% said they were not confident, similar to the 8% in March.

Confidence in making mortgage payments remains low.

An increasing number of people think house prices will rise over the next 12 months – 45% compared to 41% in March and just 23% in June 2023.

House price expectations continue to rise, making it difficult for first-time buyers.

As the housing market continues to struggle, it’s clear that something needs to be done to address the affordability crisis. The new government must commit to working with lenders, regulators, the wider housing market industry, and the public to make homes more affordable, more available, and more appropriate to the needs of those living in them and the world we live in.

The housing market continues to struggle, with affordability concerns at the forefront.

It’s time for a radical rethink of our broken housing market. We need to find ways to make homes more affordable, not just for first-time buyers but for all those struggling to get on the ladder.

It’s time for a radical rethink of our broken housing market.

As I see it, the solution lies in a combination of government schemes, lender innovation, and a shift in the way we think about housing. We need to move away from the idea that homeownership is the only way to achieve financial security and towards a more nuanced understanding of what it means to have a place to call home.

It’s time to rethink our approach to homeownership.

Only by working together can we hope to create a housing market that works for everyone, not just the privileged few.

It’s time for housing market reform.