With an estimated 2.5million house sales lost since the market downturn, Countrywide, the UK’s largest property services group, has conducted a second exclusive research study with YouGov to highlight the serious issues facing the UK housing market.
- 77% of UK homeowners believe the value of their home will have stayed the same or increased in value in 12 month’s time (November 2013).
- Nearly half (45%) of 18-24 year olds and 41% of 25-34 year olds cited deposit affordability as a barrier to buying a property at this time.
- Nearly a third of UK adults (29%) who have had an unsuccessful mortgage application said they initially approached a bank but were unsuccessful, so they approached a broker and their mortgage application was successful.
- The two main reasons cited by people who had unsuccessful mortgage applications were insufficient earnings/income (29%) and credit score too low (24%).
- 23% of UK adults surveyed who do not currently own a home believe owning their own in the next three years is an achievable goal with a higher proportion of the younger generation (29% of 18-34 year olds) surveyed believing this is an achievable goal.
Countrywide, which operates the largest estate agency and lettings network and the UK’s largest single mortgage brokerage, commissioned the YouGov research which surveyed over 2,000 UK adults, including private rental tenants, homeowners with mortgages, shared equity stakeholders, owner occupiers and those living rent-free. The findings identified several major barriers to the housing market’s recovery and identified trends in consumer confidence since the last study took place in March 2012. Highlights from the latest research include:
Job insecurity: This was most prevalent among 35-44 year olds, with 19% citing this as a reason for not buying at this time, and 12% of all UK adults surveyed citing a lack of job security as a reason for not buying, the same result when asked a similar question in March 2012 survey.
Employment status: Nearly 1 in 10 (9%) of respondents who have had an unsuccessful mortgage application cited being self employed as the main reason they were unsuccessful in their most recent mortgage application, and 11% were not given a reason why their mortgage application was unsuccessful.
Repayment affordability: 18% of 25-34 year olds advised that being unable to afford mortgage repayments was preventing them from buying a property at this time.
Living arrangements: More young adults are unhappy where they currently live with only two fifths (40%) of 18-24 year olds and 41% of 25-34 year olds claiming that ‘being happy where I live’ is preventing them from moving – a drop from 45% and 47% respectively when asked a similar question in March 2012 survey.
Generation rent: 35% of 18-24 year olds are private renters.
Mortgage uptake: Homeownership for the majority is financed with a mortgage/loan with over half of all 35-44 and 45-54 year old adults confirming they own their home through a mortgage/loan (56% and 53% respectively).
Rental prisoners: Nearly two thirds (63%) of private renters cited deposit affordability as a factor preventing them from buying at this time, compared to 56% when asked a similar question in March 2012 survey.
Tenants: 27% of all UK respondents are currently renting, of which 15% are renting privately, 6% from a housing association and 5% are living rent free.
Tenants saving to buy: Nearly a third (30%) of private renters plan to use their savings to raise the necessary deposit to get on the housing ladder in the next three years. Similarly, a third (34%) of 18-34 year olds will use savings for the deposit needed to buy their first home.
Renter’s happiness with current property: Only 29% of private renter’s referenced happiness with their current property as a reason for not buying at this time, compared to 32% in March 2012 survey.
Grenville Turner, Chief Executive of Countrywide, remarked:
“These findings reaffirm what we see on a daily basis. The shortage of appropriate housing at the right price coupled with lending issues is creating a perfect storm for the housing market.
“While many continue to see home ownership as a good investment with 77% of all UK homeowners believing the value of their home will have stayed the same or increased in value in 12 month’s time, it is disappointing to see that less people are happy where they currently live than when asked a similar question in March 2012 survey. However, the issue of deposit affordability remains the major barrier to purchasing a home for renters and we have been calling for some time now for meaningful mortgage targets, to strong-arm higher loan-to-value lending.
“More appropriate credit is urgently required in the housing market, but lending volumes for house purchases are only one third of what they were five years ago[i]. Banks need to be encouraged to lend at more favourable rates, with the introduction of higher loan to value mortgage products, to enable prospective buyers with a deposit of 10% or even 5% get on the property ladder. Restoration of the mortgage market would help unlock the current stagnated property chain with the availability of more accessible mortgages, so that prospective property purchasers, both first-time buyers and downsizers, can buy their home at a price they can afford and in a location they want to live in.”