The Building Societies Association (BSA) Property Tracker report revealed that 71% of the 2,039 people surveyed named mortgage affordability as one of the top three obstacles to buying a home. 

Since the Property Tracker launched in 2008, raising a deposit has consistently been the biggest barrier to people purchasing a home and only dropped to second place during the pandemic when it was overtaken by job security.

However, since the Bank of England started increasing the base rate in 2021, affordability has increasingly become a worry for people. In December that year, just 39% of people saw mortgage affordability as a blocker to their home buying plans. This was the same month the Bank of England increased the bank rate for the first time in over a year and brought it up from its record low of 0.1% to 0.25%. 

Since then, the base rate has risen 14 times and now sits at 5.25%. 

Despite this, keeping up with mortgage payments is not a worry for people as 87% of respondents said they did not have concerns about meeting their obligations for the next six months. 

A tenth of people have some lack of confidence when it comes to keeping up with mortgage payments for the next six months while 3% are not confident at all. 

These figures were the same as the survey responses in June and September last year. 

Renters are a little less certain about keeping up with housing costs, with 74% saying they were confident about this. 

Raising a deposit is still a concern for future buyers and 60% said this was a hindrance to them purchasing a home. Around 19% named job security and 18% mentioned a drop in house prices. 

House price falls expected 

Some 39% of respondents believe average house prices will fall in the next 12 months. This is lower than the findings of the BSA’s survey in December 2022, when 49% of people expected house prices to decline. 

A fifth predict that house prices will rise. 

Just 17% of people think now is a good time to buy property, which is the same as the sentiment held six months ago. 

Slightly more people think it is not a good time to purchase a residential property than the last survey, rising from 43%to 44%, and among those 68% are potential first-time buyers. This is up from a share of 59% future first-time buyers at the last survey.

‘No surprise affordability concerns growing’

Paul Broadhead, head of mortgage and housing policy at the BSA, said: “Following 14 consecutive Bank Rate rises it’s no surprise that concerns around mortgage affordability have grown, and it is now the biggest obstacle for would-be homebuyers. It is, however, encouraging that the vast majority of homeowners still remain confident that they can maintain their mortgage payments. As inflation figures have finally started to abate, many of these people will now be hoping for the long-awaited respite from rising interest rates. 

“Sentiment in the housing market has stabilised, though it remains weak. But we still have some way to go before real confidence returns to the market, particularly as such a high proportion of first-time buyers do not think now is a good time to get on the property ladder.  

“Lenders remain conscious that there are a number of families and individuals for whom meeting their mortgage payments is a real worry. They are ready and well-equipped to offer practical, tailored support to anyone who may be struggling and would encourage anyone with concerns to contact them as soon as possible, preferably before they miss any payments.”