The majority of people in the UK (57%) would say the double digit growth in house prices over the last year is blocking them from raising the deposit required to buy a home, new research has indicated.

A study carried out by the Building Societies Association (BSA) highlighted that saving for a deposit continues to be a significant barrier among a decline in consumer confidence across the housing market.

According to BSA’s latest Property Tracker report, the seven increases in the Bank of England’s base rate since December last year, coupled with the consequent rise in mortgage costs, has led to the affordability of mortgage repayments being selected as the biggest obstacle among consumer finances. Around two thirds (65%) cited this in the BSA report, overtaking concerns about raising a deposit.

Access to a large enough mortgage was the third biggest barrier, a concern selected by almost half the respondents (48%).

Head of mortgage and housing policy at the BSA, Paul Broadhead, said: “The current volatility in the financial markets has impacted mortgage availability and prices, but the mortgage market remains open, and borrowers will be able to remortgage when their fixed rate ends. It is important for people to start planning for when their current deal ends, and consider how any new deal will impact their household budgets.”

The BSA’s research, based on a survey of 2,105 adults, also indicated that just 15% of people think now is a good time to buy a property, down from 26% a year ago. This trend, however, was not consistent across the whole country as the findings showed some significant regional differences.

One in five people in London (19%) and the North East (19%) agreed that now is a good time to buy, which compared to around half that number (11%) in Scotland. Despite this, those disagreeing that now is a good time to buy a property did jump from 39% in June to 52% in September.

A similar number of people think that house prices will rise in the next 12 months (35%) as those who think they will fall in this period (31%), while over a quarter (27%) stated they are unsure, highlighting the general uncertainty across the housing market.

“I expect that affordability for house buyers will remain a key barrier to homeownership for some time as many will not be able to borrow the same amount in the higher interest rate environment,” Broadhead added. “This may well lead to some downward pressure on house prices.

“However, the lack of supply of properties on the market compared to the number of buyers may still continue to provide some support to prices, as will the cut to stamp duty.”

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