Raising a deposit has – for the last ten years – been cited consistently as the most arduous challenge for would-be first-time buyers eager to get onto the property ladder.
But the economic impact of the coronavirus pandemic has meant the factor putting people off making the move is now connected to the lack of employment of threat of losing jobs, according to a study by the Building Societies Association (BSA).
It’s not just the difficulty taking out a mortgage which is hitting people’s confidence – there are obvious concerns about the housing market too.
Almost half of those quizzed by the BSA thought house prices would fall in the next 12 months and just 16% predicted a rise.
Paul Broadhead, head of mortgages and housing at the BSA, said it was unsurprising confidence in the housing market had waned. “Covid-19,” he said, “has impacted every facet of our lives, and the housing market is not immune.”
Return to the housing market
The survey results showed signs there may be some positivity amongst potential buyers, with around half who were ‘active’ before the pandemic indicating they would return to the housing market with six months. In fact, 52% of sellers felt the same.
The BSA also discovered more than a third of buyers had already returned to the property-buying process or planned to do so within the next month.
Nearly one in three said they would either put their property on the market within one month or had kept it on the market throughout the lockdown period.
Only 5% of sellers have decided not to put their property on the market due to the Coronavirus outbreak, and 11% of buyers have decided to no longer look to buy a property in the next two years.
Safety and security
When asked what would instil confidence in the UK housing market – the majority of respondents cited safety and security.
Indeed, ‘evidence that properties can be viewed in a safe manner’ was vital to 36% and ‘increased job security’ would prove confidence boosting for 35%.
Broadhead added: “We are only just getting past the peak of the crisis, and there are already some very positive moves being made both by Government and by lenders to get the housing market moving again.
“These measures include implementing virtual valuations, extending mortgage offers and safely resuming property viewings – which these figures highlight as a key concern among consumers.
Saving cash
Broadhead also thinks, because a number of people have been able to save some during lockdown, this could also help bolster the market going forward.
“If they grow more secure about their job prospects, this may enable buyers to put a little more towards a deposit, and if prices do moderate somewhat, it could help with affordability issues – especially for first-time buyers,” he said.
“Once the market settles back into some form of normality and confidence in job security rebuilds, we could see a fresh landscape that appeals to aspiring homeowners.”
Loading ...