A third (33 per cent) of people think house prices will rise over the next 12 months, a report from the Building Societies Association has revealed.
The report, Property Tracker, found this was a “significant” change from three months previously when only 20 per cent thought prices would rise.
The findings represented the “most optimistic outlook since September 2022”, according to BSA, and is likely to be influenced by the halt in bank rate rises, more available lower mortgage interest rates, and house prices rising over the past three months.
A corresponding shift in those who think house prices will fall in the next year was also reported by the association, with 24 per cent expressing this belief compared to 39 per cent in September.
The report also discovered that, while mortgage affordability remained the biggest obstacle to home ownership, the proportion of people citing it had fallen.
Evidencing this, the association reported that, in December, only 68 per cent of respondents identified mortgage affordability as a barrier compared to 71 per cent in September.
Raising a deposit continues to be a significant barrier to buying a residential property, but this also shows signs of reducing as it was cited by 58 per cent in December compared with 60 per cent in September.
Affordability concerns
When homeowners were asked about the affordability of their monthly mortgage payments over the next six months, the majority did not express any concern about keeping up with their housing costs.
The research found that 85 per cent of mortgage borrowers are confident about keeping up with their payments.
These figures remained relatively unchanged over the past year, however, the proportion who said they are not at all confident increased to 5 per cent in December.
The association stated that, while this remains a small proportion of the total, it demonstrates that the number of people experiencing financial difficulties “is rising” and building societies and other lenders are continuing to offer support to struggling borrowers.
The report also examined sentiment in the housing market which was found to remain “subdued, but stable”, with the proportion of people who think now is a good time to buy a property is just 16 per cent, around the same as it has been throughout 2023.
However, those who specifically think now is not a good time to buy a new home is “considerably” higher at 41 per cent, rising to 46 per cent for first-time buyers.
tom.dunstan@ft.com
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