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Demand to buy a home remains weak

Demand to buy a home remains weak

Category: Mortgages

Updated: 16/03/2011
First Published: 16/03/2011

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

While people ultimately see themselves owning a home in the future, the demand to buy a property in the short term remains weak.

Figures from the Building Societies Association (BSA) show that just 41% of people think that it is currently a good time to buy a home, down from 43% in December.

By contrast, almost three in ten (29%) disagreed that it is a good time to be dipping a toe into the property waters, up from 26% three months ago.

The remainder were unsure of whether now is a good time to buy a home.

High requirements for deposits and uncertain economic conditions mean that many people are unprepared to make such a big financial commitment at the present time.

The proportion of people saying that a lack of job security was a barrier to purchasing a home increased from 53% in December to 57%.

Fifty-eight per cent said they wouldn't be able to muster together a big enough deposit.

The figures come against a backdrop of data that shows that unemployment has risen to 2.73 million – the highest level for 17 years.

But despite the doom and gloom, just 5% of people said that Britons should not aspire to own their own home.

Of the overwhelming majority that said home ownership was a worthwhile aim, reasons varied from making a place their own to having an asset that could increase over time.

"The Property Tracker indicates that people continue to aspire to own their own home, despite an increased level of concern about job security," said Paul Broadhead, head of mortgage policy at the BSA.

"Home ownership means they can make the improvements to their property that they want, it gives them stability, and they also believe they may see their wealth increase over time. These motives appear to be intertwined, showing the reasons for home ownership are complex.

"However, people believe that substantial barriers to buying property persist. These include raising a deposit, a lack of job security, and difficulty obtaining a large enough mortgage. Against the uncertain economic outlook, job insecurity increased slightly as a barrier in the latest results."

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