Monday, 04 July 2022

BSA reports on attitudes to housing market

THE Building Societies Association (BSA) has published a report about the impact on consumers of
double-digit house price growth, rising interest rates, the escalating cost of living and
the Russian invasion of Ukraine.

According to the BSA’s property tracker report, 65 per cent of respondents said they are worried about the rising price of goods and services over the next six months.

Nearly half, 48 per cent, said they plan to cut their energy use, and the same number will spend less on non-essential purchases because their cost of living has increased. A third of respondents said they will be spending less on essential purchases such as food.

Almost one in five, or 17 per cent, said they will be digging into their savings to cover the increase in living costs, while 41 per cent will be shopping around more to save money.

The majority of those with an existing mortgage, 90 per cent, said they are confident they will be able to meet their regular mortgage payments over the next six months. This is probably because 81 per cent of all UK mortgages are on a fixed rate and therefore protected from rising interest rates for the time being.

Despite the significant growth in house prices over the last 12 months, almost half of respondents expect prices to continue to rise over the next year.

Paul Broadhead, head of mortgage and housing policy at the BSA said: “The property tracker report is a useful temperature check on how consumers are feeling about the property market.

“It’s good to see that the majority of mortgage holders remain confident that they will be able to continue to make their mortgage payments.

“However, the increase in the number of people citing mortgage affordability as a barrier to buying a home is likely to continue if we keep seeing high demand and low supply in the housing market.

“Price growth at the current pace is clearly unsustainable and a much higher volume of new build and resale homes coming to market is needed to change this dynamic.

“As we all experience the impact of the rising cost of living, and watch the how the Russian invasion of Ukraine and the consequent sanctions is affecting energy prices, it’s not surprising that many are feeling worried about making their budgets stretch and considering changes they can make.”


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