A shortage of homes for sale is emerging as the biggest barrier to house hunters as the availability of mortgages and selling a home become less difficult according to the results of new research.
The findings of the Barratt Home Buyers study of 2,275 homebuyers in Britain, has revealed a significant shift in market perceptions compared with a year ago with fewer people citing finance issues and selling their own home as difficulties.
The ability of homebuyers to find a suitable property is now cited by 30 per cent of respondents as difficult. It is only seen as easy by 5 per cent of those surveyed. A third (32 per cent) reported that they have now been looking for a house for over six months.
A year ago, raising a deposit (39 per cent), finding a mortgage (30 per cent) and selling a home (35 per cent) were the main difficulties most often cited by the Barratt respondents. In the latest findings those experiencing difficulties finding a mortgage have halved (15 per cent) as have those experiencing difficulties selling an existing property (17 per cent).
First Time Buyers in the study are on average expecting to put down a 15 per cent deposit which would equate to around £25k based on the average Barratt First time buyer price of around £165,000. However, a more realistic deposit requirement is now 10 per cent (£16,000 on Barratt first time buyer price) and as low as 5 per cent or £8k under the NewBuy scheme.
The NewBuy scheme is not as well understood as it might be. Nearly two thirds (65 per cent) of homebuyers said that they were unaware of a tax-payer backed mortgage scheme. More encouragingly 12 per cent of the sample were aware and intended to use the scheme.
Commenting on the latest findings of the Panel Mark Clare, CEO of Barratt Developments said: “There has clearly been a shift in the market with a growing belief that the availability of mortgage finance has become a little easier – that’s got to be good news for homebuyers. However, customers are overestimating the size of the deposit that they would need, particularly as NewBuy becomes established in the market.
“The Barratt study also underlines how low the level of activity in the market remains with a scarcity of property to buy. We are now steadily increasing production and this year we are likely to build more homes than at any time in last five years.
”In the last few years, we have invested 2 billion pounds in land and our priority is now to bring these new sites into production.”
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