BSA: Credit conditions are beginning to ease, say homebuyers
The availability of mortgage finance has improved say consumers, but fear of being turned down rather than actual experience still puts people off buying a property, the Building Societies Association's (BSA) quarterly Property Tracker report has revealed.
Over the last year, credit conditions have begun to ease for homebuyers, the UK-wide survey of 2,000 people has suggested. Although 'access to mortgage finance' remains one of the largest barriers to property purchase, less than half (46 per cent) of consumers said this was a hurdle to overcome in September 2012, 13 percentage points lower than the 59 per cent who cited this as a barrier in September 2011.
Despite credit conditions easing in the eyes of homebuyers, the Property Tracker report also found that only a very small proportion of people who said that the prospect of getting a mortgage put them off from buying had actually spoken to a lender or undertaken their own research. Overall 21 per cent said the main reason they were put off was that they had concerns that their income was not high enough to borrow as much as they would like, 16 per cent said they were put off because news stories reported a lack of mortgage lending by banks and building societies, 16 per cent had concerns that their deposit was not large enough and 14 per cent said it was because of a fear of being turned down for a mortgage. Just three per cent had applied for a mortgage and been turned down, and four per cent had spoken to a broker or lender or done other research and concluded they might not get a mortgage.
For first-time buyers, 29 per cent said it was belief that their deposit was not large enough which put them off purchasing property, whilst nearly a quarter (23 per cent) said they had a fear of being turned down for a mortgage. A further 13 per cent said they were put off because of stories reported in the news about a lack of mortgage funding.
Paul Broadhead, Head of Mortgage Policy at the BSA, commented: "Results from our Property Tracker report indicate that the barriers to purchasing property may be largely down to perception, rather than actual experience. Although mortgage availability has undoubtedly reduced since the start of the financial crisis, some lenders such as building societies and other mutuals have actually increased their lending to all types of borrowers, including first-time buyers, over the last year or so."
"In the first seven months of 2012, mutuals lending has increased by 39 per cent compared to the same period last year and over the same periods the number of loans made by mutuals at loan to value ratios at or above 85 per cent has increased by 27 per cent. Homebuyers may be surprised to find that a mortgage is within their reach and should talk to a lender or broker before counting themselves out of the housing market."
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Contact: Hilary McVitty
Email: hilary.mcvitty@bsa.org.uk
Tel: 020 7520 5926
Contact: Victoria Bamber
Email: Victoria.bamber@bsa.org.uk
Tel: 020 7520 5927
Notes to Editors
1. The Property Tracker survey is conducted quarterly by Canadean Consumer for the Building Societies Association (BSA). Figures prior to June 2012 are from YouGov Plc. Total sample size September 2012 was 2,000 adults. Fieldwork was undertaken on 1-3 September 2012. The survey was carried out online. The figures have been weighted and are representative of all GB adults (aged 18+).
2. The September Property Tracker report can be downloaded here – http://www.bsa.org.uk/keystats/ptracker.htm
3. These averages are medians calculated by the BSA from Canadean Consumer data, excluding those that replied "don't know" and assuming responses are evenly distributed through each range of price changes that could be chosen.
4. The proportion agreeing includes those who agree strongly and those who tend to agree, while the proportion disagreeing includes those who disagree strongly and those who tend to disagree. Excludes respondents who answered 'don't know' so percentages do not sum to one hundred
5. The BSA Property Tracker changed research providers in June 2012. Differences in samples and methodologies may have caused variations in results compared to previous surveys.
6. The Building Societies Association (BSA) represents mutual lenders and deposit takers in the UK, including all 47 building societies. Mutual lenders and deposit takers have circa 32 million customers, total assets of over £375 billion and, together with their subsidiaries, hold residential mortgages of nearly £240 billion, 19% of the total outstanding in the UK.
Katie Wise
Policy and External Affairs Officer
Building Societies Association
6th Floor, York House
23 Kingsway
London
WC2B 6UJ
Tel: 020 7520 5904
Email: katie.wise@bsa.org.uk
Web: www.bsa.org.uk
Twitter: @BSABuildingSocs
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