Falling mortgage rates may be good news for homebuyers, but affordability remains a major obstacle to those wanting to buy a home.
Not being able to afford mortgage payments is the number one barrier for those wanting to buy a home, according to the Building Societies Association’s (BSA) latest property tracker survey, with 61% of respondents claiming that it’s the main obstacle they face.
Affordability is even more of an issue for first-time buyers, with two-thirds (65%) citing it as the biggest reason they are unable to get onto the property ladder.
The survey found that just 17% of people believe that now is a good time to purchase a property, down from 20% in January of this year. More than a third (38%) said they didn’t think now was a good time to buy a home.
Paul Broadhead, Head of Mortgage and Housing Policy at the BSA said “It’s not surprising that sentiment in the housing market has declined overall, with the recent changes to stamp duty meaning pretty much every house purchaser will now pay more. But for first-time buyers the extra stamp duty tax which they now need to pay is substantial and increases the already significant burden of raising the upfront costs required to buy a home.
“A thriving housing market needs first-time buyers to be able to get on the property ladder. But the prospects for many of today’s would-be first-time buyers looks increasingly challenging.”
The BSA expects sentiment in the property market to improve in coming months if the Bank of England’s Monetary Policy Committee cuts the base rate in May. However, it wants to see “action not words” from the Government when it comes to building more affordable housing options for first-time buyers, along with changes to regulations to help remove some of the barriers they face.
