Optimism has started to return to the UK’s housing market, after a lull in the autumn of 2014, the BSA’s head of mortgage policy has said.
In response to the BSA’s latest Property Tracker report, Paul Broadhead said that more than one-third of people now believe this is a good time to buy.
The rebound since September is particularly marked by a substantial drop in the number of people who think now is a bad time to buy.
Taken together, the Property Tracker index has bounced back from a 9 per cent low in September 2014 to 23 per cent today.
Mr Broadhead added: “Optimism in the housing market is back after a long, slow winter. Conditions in the mortgage market and the wider economy are improving and this confidence is driving consumer sentiment - especially those looking to purchase a home.
“Consumers and providers are also cheered by the fact that house building is starting to increase, household finances are less squeezed and inflation has fallen to 0 per cent.”
Mr Broadhead said he did not think deflation would be damaging to the housing market provided it is short lived and not generated by a fall in demand in the economy.
Despite average wages increasing and high levels of employment, raising a deposit is the greatest barrier to buying a home, according to the four-page report.
Overall 59 per cent of those surveyed say that this is the biggest hurdle they have to overcome, up by three percentage points on December 2014.
Mr Broadhead said the most sustainable way of tackling the “affordability challenge” is building more homes.
The report also found that average mortgage rates are at an all-time low with the average rate in February just 3.36 per cent, down from 3.40 per cent in December and 3.70 per cent in February last year.
Adviser view
Daniel Bailey, a mortgage adviser with Derbyshire-based Middleton Finance, said: “Generally the mood is quite positive - enquiries are up and the amount of mortgages I’m doing is up.
“The only negative is the issue of the deposit for first-time buyers. The majority of FTBs I have had dealings with have had to rely on their parents.”
