Housing Market sentiment remains ‘negative’ as Brexit uncertainty and rising living costs cast shadow

December 13, 2019
Close up of keys to a house in the background

Housing market sentiment remains negative despite more people believing prices will rise in 2020, according to a joint building societies report.

 

Despite rising optimism among consumers, people remain cautious as uncertainty over Brexit, worries over the cost of living and the general election continues.

 

Of those surveyed by the Building Societies Association (BSA), nearly three in 10 (28%) of people expect house prices to increase over the coming year, an increase of 5% year-on-year.

 

Brexit is uppermost in people’s minds, with 43% of people surveyed saying lack of clarity over the UK’s exit from the EU was the biggest risk to the stability of the housing market in 2020.

 

Rising living costs are also seen as a significant perceived risk, given by 36% of those asked, while weak economic growth (30%) also weighed heavily on people’s minds, the BSA’s Property Tracker’s survey found.

 

Next week’s general election result was also seen as a risk factor by 30% of those asked.

 

The survey also showed that the biggest barrier to home ownership remains raising a deposit, selected by nearly two thirds (62%) of the more than 2,000 people asked.

 

The Help to Buy Isa, which gave aspiring first-time buyers a government bonus towards their savings, recently closed to new savers.

 

Paul Broadhead, BSA head of mortgages and housing, said: “With a clear path still not set for Brexit, and with next week’s election making an impact, market sentiment has remained negative since June 2017.

 

“Raising a deposit continues to be the biggest barrier to home ownership.

 

“With the Help to Buy Isa now closed to new applicants, it will be interesting to see how the new government addresses the issue of helping people onto the property ladder, along with the wider housing crisis.

 

“Those who have missed the deadline could still receive government support to buy their first home by opening a Lifetime ISA.”