BSA: Uncertainty remains in the UK housing market as 2012 draws to a close
More than one in four wannabe first time buyers say that it will take them ten years or more to raise the necessary deposit to buy a property, say the BSA in their 19th edition of Property Tracker, published today. But 26 per cent of potential buyers surveyed at the end of 2012 believe that they can raise a deposit in three years or less. This is in stark comparison to the 69% who said they did this before the start of the credit crunch in 2008.
Since September 2010 raising a deposit has consistently been the biggest barrier to property ownership right across the spectrum of homebuyers. Looking ahead to 2013, nearly a third of first-time buyers are pessimistic about their chances, believing that things will only get harder next year. Most are reliant solely on their own savings, rather than the bank of mum and dad, to raise a deposit. Below inflation wage rises, higher rents and the increasing cost of living are all making saving harder.
Although deposits are plainly still an issue, access to mortgage finance has eased with less then half of the public (45%) now saying that it is a barrier to property purchase – the lowest since the BSA started tracking consumer views on home purchase in 2008.
Looking ahead to 2013, amongst those planning to buy for the first time in the future, 23 per cent said that they believed they would be living in a property that they owned by the end of the year, whereas 73% said they would still be renting or living with family or friends.
Since the credit crunch owner occupation has been falling in the UK, down from 14.7 million to 14.5 million households between 2007 and 2011. This is backed up by 2011 Census data released last week.
Commenting, BSA Head of Mortgage Policy Paul Broadhead said: "Buyers and lenders alike are adjusting to a new kind of normal in the UK housing market and the headwinds generated by a weak economic environment mean that it is here to stay right now. It is, however, a complete myth that no first time buyers are getting their feet onto the housing ladder. Between January and October 2012, building societies and other mutual lenders helped 22,000 more first timers buy their own home than in the same period last year, with around one in every three mortgages made to this group. Mutual lenders have contributed most of the net lending in the UK this year as some banks have shrunk their balance sheets."
"Looking ahead to 2013, there is no doubt that sensible creativity will be required from all of those involved in the mortgage market. There is potential to grow and develop alternative forms of tenure for the future, although simplicity and transparency for the consumer must be at the core of any such developments. In addition, it would be helpful if government and regulators could decide their priority between the 'lend and lend now' rhetoric and the demands to grow capital – lenders can't do both."
Ends
Press contacts:
Hilary McVitty: hilary.mcvitty@bsa.org.uk Tel: 0207 520 5926
Victoria Bamber: Victoria.bamber@bsa.org.uk Tel: 0207 520 5927
Editors Notes:
Regional Statistics:
How long it took to save for a deposit before 2008
Northern Ireland – 2 years
Scotland – 2yrs 3months
North East- 2yrs 7months
West Midlands – 2yrs 9mths
Yorkshire & Humber – 2yrs 10mths
East Midlands – 2yrs 11mths
South West – 2yrs 11mths
East Anglia – 3yrs 2mths
Wales – 3yrs 3mths
North West – 3yrs 3mths
South East – 3yrs 8mths
Greater London – 4yrs 2mths
How long it has taken the average Briton after 2008 to save for a deposit – 5 years 1 month
The average time to save for a deposit in 2013 according to first time buyers – 6 years 2 months
1. The Building Societies Association (BSA) represents mutual lenders and deposit takers in the UK including all 47 UK building societies. Mutual lenders and deposit takers have total assets of over £375 billion and, together with their subsidiaries, hold residential mortgages of £245 billion, 20% of the total outstanding in the UK. They hold more than £250 billion of retail deposits, accounting for 22% of all such deposits in the UK. Mutual deposit takers account for 31% of cash ISA balances. They employ approximately 50,000 full and part-time staff and operate through approximately 2,000 branches.
2. Photographs of Paul Broadhead are available from the BSA press office, or from the Association's website at www.bsa.org.uk or Headlinemoney www.headlinemoney.co.uk
3. Follow the BSA on Twitter @BSABuildingSocs
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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