Mortgage affordability has emerged as the primary barrier to home ownership, overtaking the hurdle of raising a deposit, according to the latest Property Tracker report from the Building Societies Association (BSA).
The report revealed that 71% of respondents cite the cost of monthly mortgage payments as a significant impediment when asked for their top three barriers, marking the highest level of concern in this area in 15 years.
Paul Broadhead, head of mortgage and housing policy at the BSA, said: “Following 13 consecutive Bank Rate rises it’s no surprise that concerns around mortgage affordability have grown, and it is now the biggest obstacle for would-be homebuyers. It is, however, encouraging that the vast majority of homeowners still remain confident that they can maintain their mortgage payments.”
Since the Bank of England began increasing interest rates in December 2021, the number of people who view mortgage payments as a barrier has substantially grown. In comparison, in December 2021, only 39% cited mortgage affordability as a concern.
Raising a deposit still remains a substantial obstacle for 60% of the population. Other concerns such as job security and the risk of falling house prices were less frequently cited, noted by 19% and 18% of respondents, respectively.
Despite the rising concerns around the cost of mortgages, the majority of current homeowners do not share these anxieties. The report indicated that 87% of mortgage holders are not worried about their ability to meet their monthly payment obligations over the next six months. Those who rent their homes are somewhat less confident, with around 74% expressing assurance about their housing costs.
Market sentiment, meanwhile, remains subdued. Only 17% of respondents think now is a good time to buy a property. Among potential first-time buyers, the sentiment is even less optimistic, with nearly 68% indicating it’s not a favourable time to enter the market.
Broadhead added: “Sentiment in the housing market has stabilised, though it remains weak. But we still have some way to go before real confidence returns to the market, particularly as such a high proportion of first-time buyers do not think now is a good time to get on the property ladder.”
Opinions about future house prices are divided. The survey found 39% expect prices to fall in the next 12 months, a decrease from 49% who thought similarly in December 2022. A smaller percentage, 20%, anticipate a rise in house prices in the coming year.
Broadhead concluded: “Lenders remain conscious that there are a number of families and individuals for whom meeting their mortgage payments is a real worry. They are ready and well equipped to offer practical, tailored support to anyone who may be struggling and would encourage anyone with concerns to contact them as soon as possible, preferably before they miss any payments.”
