Affordability worries hit home buyers

29 March 2017

Almost half of consumers (49%) expect house prices to rise over the next 12 months, while just 10% expect them to fall, according to new industry data. And this has led to worries about how they will afford to buy a property.

The Building Societies Association’s (BSA) Property Tracker survey reveals that consumer expectations about house prices have bounced back to pre-EU referendum levels after a period of uncertainty.

However, house buyers are concerned about how they will afford to buy a property, with 67% of consumers admitting that their main worry is about raising a deposit to buy a home – up from 64% in December 2016. Almost half (49%) believe that getting a large enough mortgage is an issue – up from 44% in December.


Some 42% of the 2,000 adults who were polled also reported mortgage affordability as a worry, while 34% are concerned about the lack of job security.

Paul Broadhead, head of mortgage policy at the BSA, says: “Today, with actual house prices still rising above earnings in many regions, raising a deposit is an intractable issue. It particularly impacts first-time buyers, but second-steppers aren’t immune. Higher consumer price inflation will also adversely affect people’s ability to build a deposit in the year ahead.

“No single action can fully address the housing issues consumers face, but increasing the supply of homes would go a long way to limit rising prices. A period of house price stability would, in my view, be welcome.”


Annual earnings don’t rise fast enough

This poll comes in the wake of a separate report from independent mortgage broker Private Finance that reveals that just 2% of UK occupations have seen housing affordability improve since 2011.

A comparison of average gross annual earnings and house prices from 2011-2016 using official government data reveals that, across 304 occupations where data is available, just five occupations have seen gross annual earnings rise enough in the past five years so that homeowners could afford the average UK home. These were aircraft pilots and flight engineers; electronics engineers; rubber process operatives; energy plant operatives; and merchandisers and window dressers.

It reports that UK wages have risen by just 9% across all employees since 2011, leaving the average house price costing more than nine years of their gross earnings.

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