Potential Homebuyers Sitting On The Fence
There has been a lot of turbulence and uncertainty in the housing and home loan markets over the past twelve months, since the beginning of the credit crunch, with the prospect of falling house prices and a much smaller choice of more restrictive and expensive mortgage and home loan products than at the same time last year.
In addition to this, the situation is being made worse by large increases in the cost of living and high inflation, caused by high food and fuel costs, along with worries over job security and the potential for rising unemployment. As a result of these factors, many people who may have otherwise taken out a home loan and bought a property, are postponing their plans until the market settles down.
According to new research from HSBC, above one in three potential home buyers are not prepared to commit to purchasing at present, due to their belief that both house prices and interest rates on mortgages and home loans are likely to be cheaper in six months time than they currently are.
The research also highlighted that, although there is the feeling amongst borrowers that it is difficult to obtain a loan for a property, around 98 per cent of those considering purchasing would be accepted for a mortgage loan. Of those people interviewed, ten per cent were planning to buy now, whilst 37 per cent were intending to wait until prices fell further and 36 per cent lacked the confidence to purchase, due to the unstable economy and rising costs.
The head of mortgage loans for HSBC said “Many buyers are taking a wait and see attitude, naturally some feel uncomfortable buying a home which may be worth less in six months time. Almost one in four buyers think they might struggle to get a mortgage, however just one in fifty has actually given up on their purchase due to failing to find a suitable loan. Anyone keen to buy a home still has an extensive range of mortgage options.”
