According to a survey conducted by the HomeOwners Alliance, myhomemove and BLP Insurance, confidence in the housing market is rebounding as concerns about stamp duty and negative equity fade away.
The report revealed that people’s concerns about housing have receded ‘across the board’ over the last year. Most dramatically, the numbers saying that negative equity is a problem has slumped in the last 12 months by more than 10%. Concerns about stamp duty rates have seen a near identical drop.
The proportion of adults who say stamp duty is a serious problem has dropped from 64% in 2014 to 51% in 2015, In the wake of the government’s reforms of the system last year, one third say they feel the recent changes to stamp duty have made it more affordable for them to buy their first home or to move up the property ladder. The HomeOwners Alliance campaigned strongly for reform of the stamp duty system, and welcomed the reduction in rates at the lower end of the housing market and abolition of the hated “slab” system.
Concerns about estate agent fees, conveyancers’ fees and being able to pay off the mortgage have all eased over the past year. Yet the ability for aspiring first-time buyers to get on the property ladder continues to be a top housing concern with 83% of UK adults saying it is a serious problem. Among those aspiring to get on the ladder, house prices, saving for a deposit, the ability to get a mortgage/remortgage and quality of housing are rated as more significant issues than among UK adults generally.
Key findings from the survey include:
Ability for aspiring first-time buyers to get onto the property ladder (83% saying it is a serious problem) and saving for a deposit (83%) top the list of housing concerns nationally, followed by house prices (76%) and the ability to get a mortgage (72%).
The proportion of adults who say negative equity is a serious problem has dropped down to 49% from 64% last year; after a steady increase in house prices. Negative equity continues to be a key concern in Northern Ireland, with 68% saying it is a serious problem.
Concern over stamp duty rates has also fallen sharply (64% in 2014 to 51% in 2015), with 1 in 3 saying that the recent changes to stamp duty have made it more affordable for them to buy their first home or move up the property ladder.
Housing anxiety has subsided, with UK adults saying they are less concerned than last year across the board, including property/solicitor fees, and the quality of housing.
Regionally, concern about high house prices continues to be greater in London than in other regions. (60% of Londoners say house prices are a very serious problem compared with 40% in the UK generally). The proportion saying house prices are a very serious problem in London has risen 5% in the past year. Those living in Northern Ireland and the North East are more concerned with housing availability and negative equity than elsewhere in the UK.
Nearly half of adults (49%) say gazumping is a serious issue, while 43% say gazundering is a serious issue. 51% of adults believe that the homebuying/selling process in this country is a serious issue.
The leasehold and freehold system is causing widespread concern across the UK, with 42% of adults saying it is a serious problem. In London, East Midlands and East of England, around half of people say it is a serious problem.
Aspiration to own your own home has edged up slightly, with 69% wanting to own, compared to 68% last year and 65% in January 2013.
Aspiring homeowners are significantly more concerned than UK adults, with house prices (84% vs 76%) and the quality of housing (57% vs 49%).
Paula Higgins, the chief executive of the HomeOwners Alliance, says: “It is very welcome that concerns about stamp duty and negative equity have fallen so sharply over the last year, but 83% of us worry about prospects for first time buyers. Recent announcements about building new homes and Help to Buy ISAS are good but with low wage growth, high house prices, and the current lending criteria constraining aspirations to buy a home, we have a long way to go to reverse the decline in homeownership. Every year the number of aspiring homeowners grows - while the rate of quality housing being built in the right place at the right price falls well short. There are extremely high levels of concern about high house prices, a shortage of housing, saving for a deposit, and getting mortgages, particularly amongst those trying to buy their first home. On top of that, homeowners have serious problems with gazumping, leasehold issues, poor quality of housing and the whole house-buying and selling process. Owning a home is one of the most important things in people’s lives, and it is ridiculous that it is fraught with so many serious problems.”
Doug Crawford, CEO of myhomemove says: “The reduced level of concern over Stamp Duty is welcome news to many within the property market. Our clients would have saved £51 million if the reforms had been introduced two years early – the reason why we have been lobbying for change. Our data shows an increasing number of buyers are purchasing properties above £250,000 since the new Stamp Duty system was introduced. Under the old ‘slab’ system, the significant increase in Stamp Duty payable on properties above this amount acted as a barrier for buyers looking to move up the property ladder. The new system allows buyers to own properties that would have previously been unobtainable due to the substantial cost of Stamp Duty before the changes came into force.”
Wayne Tonge, Head of Sales, BLP Insurance, says: “As confidence in the housing market makes a welcome return homeowners must keep their feet on the ground. When the market recovers and the money starts to flow, standards will potentially drop and aspiring homeowners should be taking steps to protect one of the largest investments they are ever likely to make. While increasing construction goes hand in hand with falling standard, homeowners can protect themselves and their homes when something goes wrong.”