Election uncertainties denting confidence in the UK property markets, it is claimed

People expect property prices to increase over the next 12 months but are being put off by political uncertainty that could affect their buying power, according to research by the Building Societies Association.
 
Its latest Property Tracker survey has found that people expect property prices to rise by 2.2% over the next twelve months but just 49% thought that now is a good time to buy property. This compares to 58% in December 2009, and is the first time that the proportion agreeing that now was a good time to buy property has fallen below half since December 2008.
 
‘It is no surprise that people are uncertain if now is a good time to buy property. Potential buyers will be waiting to see the effect on the property market of the end of the Stamp Duty holiday. The forthcoming budget and general election provide further levels of uncertainty to potential homebuyers,’ said Paul Broadhead, Head of Mortgage Policy at the BSA.
 
‘However, despite these concerns, people still expect property prices to rise over the next year, showing that they believe that property remains a good investment. Once the election is over and people are more confident about the economic outlook, we hope that buyers will return to the market,’ he added.
 
Meanwhile, research also suggests that 2010 could be a better year for first time buyers. Some 42% of enquiries to mortgage advisers are from those seeking to buy their first property, according to the latest Advice Drivers report from Unbiased.co.uk.
 
This has remained high since the start of the year, which saw 43% of searches in January from first time buyers. While almost a third of consumers, some 32%, were searching for a whole of market mortgage adviser who specialises in remortgage advice. In addition, just over one in five, 21%, of all searches were by consumers looking for residential property advice.
 
‘It is encouraging to see first time buyers are back out in force looking to get their foot on the property ladder.  Especially as they’ve been given a helping hand by those lenders who’ve now re-introduced competitive mortgage rates on high loan-to-value products,’ said chief executive Karen Barrett.
 
‘This is a positive move which suggests lenders now have a renewed appetite to compete at the bottom end of the market after first time buyers were all but shut out by banks almost two years ago. Hopefully we may see more lenders follow these footsteps, in which case 2010 could turn out to be the year of the first time buyer,’ she added.