Consumer confidence in housing market deteriorates

Political uncertainty has caused consumer confidence towards the housing market to dip, a report from the Building Societies Association (BSA) reveals.

The newly released ‘Property Tracker’ shows just 21% of consumers say that now is a good time to buy, down from 29% in March.

The number of consumers who don’t believe it is the right time to buy (30%) has reached its highest figure since December 2008.

Paul Broadhead, head of mortgage policy at the BSA, said: “Care is always needed in interpreting consumer views in the aftermath of a political event like the General Election, particularly when the result is unexpected.

“Whilst the political effect may be short-term, some of the underlying economic fundamentals are becoming more of a challenge. “

Those aged 18-24 are least confident about buying currently (16%) whilst 44% of the demographic believe that house prices will continue to rise over the next 12 months.

Raising a deposit continues to be perceived as the single biggest barrier to home ownership with 67% of consumers citing this as a main reason preventing them from buying a home.

Broadhead added: “Over the past year, annual CPI inflation has picked up, reaching 2.9% in May, whilst the latest earnings figures for April show that wages grew by just 1.7% in the year.

“Mortgage rates, however, remain at historic lows and the market is highly competitive for those who do choose to purchase, whether for the first time or to move up the market.”

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