Print friendly version 20 Jun 2008

Survey identifies barriers to buying

Covering monthly mortgage payments is the biggest impediment to buying a home at the moment, according to a poll conducted by the Building Societies Association (BSA).

A recent survey by the trade body showed, although 51% of people don’t think now is the right time to buy, 27% of people said that it was, to some extent. However, 70% are worried about being able to cover the monthly mortgage repayments, while 49% are unsure if they could get a large enough mortgage, or even get one at all. Raising a deposit was a concern for 47% of people and the threat of future falls in house prices was enough to put 46% off buying right now.

Of those that disagreed strongly, or tended to disagree that now was a good time to buy, 59% said the possibility of future falls in the value of UK residential property would put them off buying at the moment. In comparison, of those that said now was a good time to buy, 30% believed falling house prices would stop them.

Adrian Coles, director general of the BSA, highlighted the evidence of a division among UK homebuyers shown by the survey. “People often view property buyers as a single group. However, the survey shows that is not the case and, while most people don’t believe now is a good time to buy, more than one in four people believe the opposite.

“The finding that monthly mortgage payments are currently seen as the main barrier to house purchase demonstrates the extent to which household finances are being stretched, as well as a reflection of the increased price of risk now incorporated into mortgage rates.”

However, the survey also found that a lack of job security was a barrier to buying for just 12% of respondents at the moment. Coles continued: “A significant proportion of respondents said that expected future falls in property prices are a reason not to buy. However, the fact that a lack of job security was relatively unimportant in preventing property purchase suggests that concerns about the wider economy are not currently undermining the housing market.”

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