The Building Society Association (BSA) found in its Property Tracker Survey that it is easier to secure a mortgage than at any time in the past four years with borrowing rates at five-year lows and planning approvals for new homes having risen sharply. The new report has raised hopes of a housing market revival.
The BSA survey claims that "consumers are finding it easier to access mortgage finance than at any time since the survey started in June 2008". In total around 45% of respondents said mortgage access was a barrier to home ownership in December, compared with nearly 60% at the same time last year. The improvement came alongside evidence that current interest rates on fixed-rate mortgages are the cheapest they have been since summer 2007 just before the credit crunch struck. This is good news for those undertaking a residential mortgage search.
The BSA research confirmed that waiting and saving for a deposit remains the biggest obstacle for first time buyers, with 59% citing it as a barrier. Conditions have improved in this area though given that last year, nearly 70% of buyers said it was a major hurdle.
Other figures from the House Builders Federation have also provided encouragement for the new-build market. It found that 33,881 homes received planning permission in the 3 months to September, a 36% rise on the previous quarter and a 17% rise on a similar period last year.
The new figures were released as another Bank of England survey showed that 50% of all households claimed to have been affected over the 12 months by the Government’s austerity measures. Its household spending survey, conducted by NMG Consulting, found that the poorest had suffered the most and confirmed that real household incomes after taking account of inflation, have contracted again this year.
UK households are now saving about 7% of their pre-tax income to reduce their debts, with the young saving proportionately more, as they save for deposits to buy a home.
