There are signs of a “significant reduction” in the number of homeowners concerned about paying their mortgage, research from the Building Societies Association has found.
The latest Property Tracker found just 9 per cent of homeowners are either not very confident, or not confident at all, about paying their mortgage over the next six months.
This is a reduction from the 12 per cent in December 2023 and represents the lowest level in almost two years.
The majority of people asked did not express any concerns about keeping up with their mortgage payments, with 90 per cent of borrowers confident they can pay their mortgage.
This is an increase from the 85 per cent who said the same in December 2023.
BSA head of mortgage and housing policy, Paul Broadhead, said: “The overall reduction in mortgage rates following the peak in 2023 has been welcomed by homebuyers, and has seen an improvement in confidence in the housing market.
“While consumer prices remain high, wage growth has been strong, meaning many households are now in a stronger position than six months ago.
“There is also an expectation that if inflation continues to fall, the Bank Rate may be cut this year, further easing pressures on borrowers and increasing mortgage affordability.”
Buyers’ issues
The research also looked into issues for those looking at purchasing a home, finding that affording a mortgage remains the biggest barrier.
However, this worry has fallen “significantly” recently, only being identified by 62 per cent of respondents in March compared with 71 per cent in September 2023.
Raising a deposit also remained a significant barrier, cited by 60 per cent of those surveyed.
“While affordability of mortgage payments remains the biggest barrier to house purchase, it is reassuring that this has reduced over the past six months,” Broadhead said.
He added, while there has been a welcome reduction in the people concerned about meeting their mortgage payments, lenders remain “very aware” that there are a number of homeowners who are struggling.
“They are ready to help and well equipped to offer tailored support to anyone who may be struggling and would encourage anyone with concerns to contact them as soon as possible,” he said.
When asked what trends they anticipated among house prices in the near future, 41 per cent said they believed prices will rise over the next 12 months.
This is an increase on the 33 per cent who predicted prices to rise when asked in December 2023 and the highest proportion expecting a price rise since June 2022.
In addition, there was a corresponding shift in those who think house prices will fall in the next year, with only 14 per cent believing this to be the case, compared to 24 per cent in December.
tom.dunstan@ft.com
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