The work showed that buyers were becoming increasingly cautious over how much they borrowed after four interest rate rises since August, with 77 per cent expecting another rate hike inside the next twelve months.
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Even first-time buyers were reining in their aspirations as 31 per cent admitted they didn’t want to take out the maximum amount for fear of overstretching themselves should rates rise again.
Gary Lumby, head of retail at Yorkshire Bank, said: “What our survey shows is prudence, not panic - all the signs are that the market will still remain strong. The recent rises have started to make buyers take a realistic view of what they can and can’t afford and to take measures to protect themselves against unforeseen changes in their personal circumstances.”
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Despite fears over affordability, confidence in the market was still strong, with 70 per cent of those asked expecting house prices to continue rising.
But even though buyers were showing greater caution in how far they were willing to stretch, 24 per cent said they would sacrifice other luxuries in life to obtain their dream home; a figure which rose to 36 per cent among first-timer buyers.
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Mike Fry, director at Halton Insurance Services, commented: “I think people have had their fingers burnt and are now holding back. It used to be when people had equity in their house they’d hold some back but it got to the point where they were having to put everything in. Now, if people want something they are saving for it or holding off until the market looks a bit better.”
