Opinion Former Article

BSA: Consumers' views on housing market brighten but job fears increase

The results of the BSA's Property Tracker, which takes the views of over 2,000 consumers as a market temperature check every three months, has identified some improvements in consumer sentiment in its March survey, offset by rising fears over job security.

In March, significantly more consumers said that they expect property prices to rise in 2012, 41% of those surveyed compared to 33% in December 2011. Across the UK, consumers in the South East are the most bullish with 53% forecasting that property prices will go up and 14% saying that they will fall. Those in Wales are the least optimistic on price with a fairly even spread between expectations of an increase (30%), a drop (29%) and no change (22%).

The number of consumers who report that now is a good time to buy is also holding remarkably firm, on a par with the December 2011 figure of 44%. This is better than this time last year when 41% of those surveyed thought market conditions were favourable for purchase.

Despite these improvements it remains clear that significant barriers are still in the way of aspiring home owners and growth in this sector, not least rising fears over job security. This was cited as a barrier by 56% of all respondents, up from 54% in December 2011. This concern was most acutely felt amongst women (59%) and across 45-54 year olds of both genders (65%).

The number of people who saw stamp duty as a barrier also rose, up from 10% to 12% between December 2011 and March 2012. this may be a reflection of the psychological impact of the termination of the first time buyer stamp duty holiday at the end of this month.

Of all respondents, 17% said that they were looking to buy property in the near future. This is made up of first-time buyers (6%), previous owners looking to move to another home (8%) and buy-to-let investors (3%).

The strongest intentions to buy are seen in Wales, where 23% of respondents said they were looking to buy, particularly first-time buyers (14%). In London 22% of respondents intend to buy. By contrast, the lowest intentions to buy were recorded in the West Midlands and the East of England with just 13% saying they intended to purchase property in the near future.

Describing their intentions, 17% of the under 35's surveyed said that they were looking to buy their first home. .

Over six in ten of those surveyed (62%) said that they already owned their own home. Of these 84% said that they had no intention of moving in the near future. There are indications that a proportion of this group will not be moving as they currently face significant barriers obtaining a new mortgage or raising a deposit. It is possible that this may also reflect little or no equity in their current property for some. This group were particularly concerned about job security, with 62% of citing this as a barrier, compared to 44% of owners who were looking to buy property sometime soon.

Commenting, Paul Broadhead, Head of Mortgage Policy at the BSA said: "The majority of home purchases are made because a consumer wants rather than needs to move house. This means that consumer sentiment is a useful leading indicator of future sales activity in the housing market.

"It is good to see some positive indicators, price change or an expectation of price change can stimulate activity although inevitably it isn't good news for all. Some commentators are waiting for the market to return to normal, I am not one of them. After all exactly what is normal? If you look back through the last few decades it has been a number of different things.

"I believe that both consumers and lenders are currently in a period of adjustment to a new normal. A market that will be characterised by broadly flat or slow price increases; one where transaction volumes are lower than over the past ten years; where saving to buy becomes commonplace and a proportion of the population prefers to rent. It's wrong to assume that everyone who is renting is doing it because they have to.

"Having a mixture of quality housing with a mix of tenures is a healthy position for the UK and it leads to vibrant and inclusive communities. Building societies and other mutual lenders are doing their bit with some increasing lending generally in 2012, a rise in the number of higher loan to value ratio mortgages for first time buyers plus participation in buy to let and alternatives such as shared ownership and self build. It will be interesting to see whether the Government's NewBuy Guarantee will stimulate house building, I hope it does, we need more homes."


Hilary McVitty
Tel: 020 7520 5926
Email: hilary.mcvitty@bsa.org.uk

Notes to Editors:
1. The Property Tracker survey is conducted quarterly by YouGov plc for the Building Societies Association. All figures, unless otherwise stated, are from YouGov Plc. Total sample size in March 2012 was 2,044 adults. Fieldwork was undertaken between 2-5 March 2012. The survey was carried out online. The figures have been weighted and are representative of all GB adults (aged 18+).

2. The Building Societies Association (BSA) represents mutual lenders and deposit takers in the UK including all 47 UK building societies. Mutual lenders and deposit takers have total assets of over £375 billion and, together with their subsidiaries, hold residential mortgages of over £235 billion, 19% of the total outstanding in the UK. They hold more than £250 billion of retail deposits, accounting for 22% of all such deposits in the UK. Mutual deposit takers account for 34% of cash ISA balances. They employ approximately 50,000 full and part-time staff and operate through approximately 2,000 branches.

3. Photographs of Paul Broadhead are available from the BSA press office, or from the Association's website at www.bsa.org.uk/mediacentre/contacts/spokespeople or Headlinemoney www.headlinemoney.co.uk

Katie Wise
Policy and External Affairs Officer
Building Societies Association
6th Floor, York House
23 Kingsway

Tel: 020 7520 5904
Email: katie.wise@bsa.org.uk
Web: www.bsa.org.uk
Twitter: @BSABuildingSocs

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