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Confidence in the Housing Market Cools

There has been drop in consumer confidence in the housing market, according to the Building Societies Association (BSA), which could help to reduce fears of a UK-wide housing bubble.

The BSA’s Property Tracker report revealed that the number of people who think that now is a good time to buy a home is at its lowest level since June 2008. Just 29% believe that now is a good time to buy, down from 40% three months ago.

Mark Carney, Governor of the Bank of England, recently described the property market as the ‘biggest risk to financial stability and recovery’, and the intense focus on the housing market has resulted in the Bank of England announcing that they are prepared to take action to reduce activity if necessary. However, new mortgage lending regulations, affordability constraints and media scrutiny may be beginning to have a limiting effect without intervention, says the BSA.

Building new homes is seen as the most effective way of curbing house price inflation.  This view was particularly strong amongst first-time buyers where 40% saw this as the best solution. When asked about their reaction if the Bank of England were to introduce measures making it harder to get a mortgage, 28% of first time buyers said that they would put their home buying plans on hold for the foreseeable future.

“If the Government is serious about tackling the challenges in housing, then it should appoint a Housing Minister who sits at the heart of Government,” said Paul Broadhead, Head of Mortgage Policy at the BSA. “An overarching housing strategy is urgently needed, one that looks beyond the end of the next parliament and co-ordinates the range of Government departments with an interest in and responsibility for all parts of the housing market, including infrastructure development.”

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