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Brits optimistic over the health of the housing market in the coming year

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19/11/2012
A glimmer of hope in the housing market for the coming year as more people aspire to own their own homes and homeowners optimistic over house prices, according to a recent report.

The report 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 highlighted several major barriers to the housing market’s recovery and identified trends in consumer confidence since the last study took place in March 2012.

77% of UK homeowners believe the value of their home will have stayed the same or increased in value in 12 month’s time.

23% who do not currently own a home also 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.

Despite more people looking at the idea of a owning their own home a possibility in the near future, nearly half 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.

Grenville Turner, chief executive of Countrywide, said: “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.

“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.”

 

Nearly a third of UK adults 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%).

Turner added: “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.

“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.”

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