Buyers struggle to raise deposit as market soars
HOUSE buyers across England and Wales are paying the highest proportion of their property’s asking price since 2004, with the average house going for more than 99 per cent of the asking price in London.
In March so far, buyers are shelling out 96.2 per cent of property asking prices, according to Hometrack’s assessment of the March housing market, released today.
But the soaring prices combined with tough new lending rules mean would-be buyers are increasingly worried they will not make it onto the property ladder.
The Building Societies Association’s (BSA) quarterly property tracker survey found 63 per cent of buyers say raising a deposit is a challenge, up from 60 per cent in December 2013.
The poll also found that 46 per cent say access to mortgage finance is a difficulty, up from 42 per cent previously.
It comes as the mortgage market review (MMR) rules come into force, which make lenders apply stricter affordability criteria to home loan borrowers in a bid to make sure they can still afford their repayments when interest rates rise.
Property prices are also only falling in 0.2 per cent of postcodes, according to Hometrack.
During the same month a year ago, the figure was 4.7 per cent, illustrating the broad and dramatic upswing of the market.
Similarly, 50 per cent of postcodes are now recording rising prices, more than twice the 23.9 per cent that did this time in 2013.
Hometrack noted the growing divergence between supply and demand.
“The imbalance between supply and demand is set to remain a feature of the market and prices are set to continue to rise,” its report said.
“The scale of price rises over the next 12 to 18 months will be dictated by the ability and willingness of owner occupier households and investors to further bid up the price of housing.”
The gulf in the housing markets of different parts of the country is also increasingly clear: on average, homes are now spending only 7.9 weeks on the market.
However in London the figure plunges to only three weeks, contrasting with the 10 weeks it typically takes to sell a property in the north of England and Wales.