Buyers lack confidence in Government’s housing market policy

Home movers are heading into next week’s Autumn Budget with little faith in Government policy, and growing expectations of higher borrowing costs, research suggests.

OnTheMarket’s (OTM) latest Property Sentiment Index, measuring how buyers, sellers and renters feel abut the market on a quarterly basis, found almost half of active movers say recent Government policy has had a negative impact on the property market.

It is twice as many as the 21% who believe the impact has been positive.

Among the wider public, including those not actively looking to buy, sell, or rent in the next six months, the verdict is harsher still, with 35% saying policy has hurt the market and just 9% saying it has helped.

Home movers are soldiering on with one arm tied behind their back.”

At the same time, expectations of higher borrowing costs have risen sharply.

The index found that 41% of active movers expect interest rates to rise in the next six months, up from 29% last quarter, while 44% among the wider public say the same, up from 34%. Only 8% of active movers expect rates to fall.

However, policy frustration or rate fears are not denting buyers’ confidence in their own finances.

A total of 89% of active buyers remain confident they can raise the funds for their next home, unchanged since May, which suggests higher costs are being factored into their plans rather than putting them off, OTM says.

Elsewhere, house price expectations have steadied, with 33% expecting prices to rise in the next year, up from 31% and the first increase in a year.

In addition, 87% of renters said they expect to find a property and move within six months.

Poor policy

Jason Tebb, President of OnTheMarket, (pictured) says: “Going into the Budget, home movers are soldiering on with one arm tied behind their back.

“Twice as many think Government policy has hurt the property market as believe it has helped, and far more now expect interest rates to rise. Yet buyers’ confidence in their own finances hasn’t budged, and they’re still coming to market ready to move.

“But there’s only so long people can keep battling against the odds. Next week’s Budget offers an opportunity to restore long-term confidence in the market. The Government’s Your First Home scheme should be opened up to existing homes, not just new builds, and paired with wider mortgage market reform and cuts to Stamp Duty.

“Taken together, those measures would make a meaningful difference to buyers and help get the market moving on a sustainable footing.”