Housing market sentiment falls sharply amidst continuing Brexit uncertainty

The UK housing market sentiment falls to second-lowest level since the EU referendum with Brexit uncertainty, and a growing number of people across the UK expect house prices to fall.

Confidence in the Housing Market

The Property Tracker Survey questions a minimum of 2,000 adults across Great Britain every three months.  For the past 10 years the same question about whether now is a good time to buy a home has been asked.  The resulting index provides a snapshot of consumer confidence in the housing market.

At its peak in December 2009 the index stood at +42. In March 2017 before the EU Referendum and the snap General Election it was +5. Since then it has been in negative territory with more consumers disagreeing with the statement that now is a good time to buy a property than those who agreed.

At its lowest point, in December 2018, the index stood at minus 14. In September 2019 the figure fell to minus 12 from minus 5 in June 2019. This indicates that at least discretionary home purchases may be on hold.

House prices and barriers to home ownership            

A third of people across Great Britain (33%) expect house prices to fall over the next 12 months, up from 24% in June 2019.  Just 23% of the population believe that house prices will rise.

There are regional variations, with 27% in the North East of England expecting prices to fall. This compares to 40% of people in the East of England – well above the national average of 33%.

Raising a deposit has been the biggest barrier to homeownership since the Property Tracker survey began over a decade ago. Although today’s results show that although it remains the biggest barrier at 60%, it is down from 64% in June – and is now the lowest it has been since December 2015.

Paul Broadhead, BSA Head of Mortgages & Housing comments:

“With the level of political uncertainty the country is experiencing, it is unsurprising that consumer confidence in the housing market, amongst other things has taken a knock. In the coming weeks and months, as we find out what shape Brexit will take, we are hopeful that confidence and stability will begin to return.

“We will be monitoring closely the barriers to homeownership. It is positive that raising a deposit has become a slightly lesser concern to would-be homeowners, but with the Help to Buy ISA scheme drawing to a close from November this could easily change. Some are turning to a Lifetime ISA (LISA) which follows a similar structure to the Help to Buy ISA. Currently 3 of the 4 cash LISA providers are building societies.

“Aspiring homeowners are encouraged to speak to their local building society to find out their best options, and how to make the most of their savings when raising a deposit for that all-important property purchase.”

Kindly shared by Building Societies Association (BSA)