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Rise in Property Market Optimism in Scotland

Londoners are the Least Optimistic

This is the finding of recent research by the Building Societies Association (BSA), which questions the public about a variety of issues, including whether now is a good time to buy a property or not. The BSA has been carrying out this research every quarter since June 2008.

The latest survey found that people in London are the most pessimistic about their prospects of home purchase, closely followed by the North East and the South East of England. Consumers in the North West are the most optimistic in Britain.

Barriers to Buying A House

The survey also asks consumers to identify the more practical barriers that are holding them back from buying property. Since December 2008 the single biggest barrier in Britain has consistently been the challenge of raising a deposit. Since March 2016 this has been a barrier identified by 60% or more of consumers. The latest survey, conducted in March 2018, found that 65% of consumers in Scotland identified raising a deposit as their biggest barrier to home ownership, compared to 72% in the South East and an average of 68% across Britain as a whole.

“The UK is experiencing a period of uncertainty. This is having a generally adverse effect on consumer sentiment and behaviour in the housing market,” commented Paul Broadhead, Head of Mortgage Policy at the BSA. “The concerns that consumers have are clear from a Home Purchase Index that has been negative since June 2017. The good news is that the people of Scotland seem to be bucking this trend to a degree. How consumers are behaving can in part be demonstrated by the six year high in re-mortgage lending reported by the Bank of England for January 2018 and February figures from RICS which showed listings and new buyer enquiries drifting lower in some regions, particularly London and the South East, but rising in Scotland.”

“Whilst housing market activity is likely to remain muted for the remainder of 2018 there is limited good news for would-be home buyers as house prices start to cool off in some places, mortgage finance remains readily available and fierce competition amongst lenders is good for consumers,” he added. “If the Bank Rate rises as anticipated by a further 0.25% in May, it will still be comparatively low by historic standards.”

Rise in Mortgage Completions

Finance industry trade association UK Finance has also painted a slightly more positive picture of housing market activity, publishing figures that suggest house purchases by first-time buyers and home movers reached their highest levels for February in over a decade.

Its figure show that there were 25,200 new first-time buyer mortgages completed in February 2018, which is an increase of 2.4% compared to the same month a year earlier. The £4bn of new lending in the month was 2.6% more year-on-year.

In addition, there were 24,800 new home mover mortgages completed in the month, the same as February a year earlier. The £5.3bn of new lending in the month was 1.9% more year-on-year.

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