New research from HSBC has found that 98 per cent of potential housebuyers have no problem arranging a mortgage, but the home buying market is slowing sharply because people expect house prices to fall further and are not confident in their ability to fund a new property as the cost of living, including mortgages rises.
HSBC's study found that one in 10 Britons are keen to move house or get on the housing ladder, but have decided hold off for at least six months. Of these ‘delayers' just two per cent said they had difficulty getting a mortgage, but 37 per cent said they did not want to buy while prices are expected to fall further and 36 per cent said they were worried about the rising cost of living. Martijn van der Heijden, HSBC's "Almost one in four buyers think they might struggle to get a mortgage, however just one in fifty has actually given up on their purchase due to failing to find a suitable loan. Anyone keen to buy a home still has an extensive range of mortgage options. Lenders like HSBC, who have traditionally taken a responsible approach, have continued to lend at competitive rates and will continue to do so." The study, which asked over 3,000 UK adults of their home buying intentions over the next six months, set out to give clear insight into the motivations of Britons either actively looking to purchase a property or those keen to purchase, but no longer compelled to in the current unstable housing market. The study highlighted two groups of households, those actively looking to make a property purchase and a second group keen to move but choosing to delay for at least six months. For those people moving, the ‘Investment of homeownership' is the primary reason given (26 per cent) for going ahead with their purchase, suggesting that faith in long term house price growth is alive and well. For those who would like to move but can't or wont, ‘needing more space' is their top choice (29 per cent), suggesting households in this position are prepared to make do with the space they currently have and sit tight until the market stabilises. Britons looking to change their lifestyle are not being put off moving home by the current instability. Almost one in five (19 per cent) people currently looking to buy give it as a reason for moving, however less than one in ten (seven per cent) of people delaying their purchase gave it as their primary reason for wanting to move. In contrast, the study confirms first time buyers are staying away from the property market for the time being, 18 per cent of buyers are doing so to get their feet on the property ladder, whereas 24 per cent of ‘delayers' claim to be first time buyers.
Date: 13th, August, 2008
Author: Ben Wilkie
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