Examining the public’s views on residential property purchase for the first time, the report gives an in-depth insight into property trends from the public’s perspective.
The report finds that the ingrained British desire for homeownership is the core reason for buying a home. More than three quarters (77%) of respondents were buying a home to live in and the primary motivation for these people was that they wanted to own a home (88%). Making money from property purchase was important to less than half of those questioned (45%).
Even if there were a 15% fall in house prices, just 2% of homeowners would sell up immediately. Most (63%) would simply retain ownership of their property whilst 11% would retain the property with a view to selling once prices recovered. 17% said they would actually look to purchase more property in this scenario – a clear indication of the strength of demand
The research also shows that those investing in property do so with the long term in mind. Many (89%) see property as a good investment for their pension, and 89% also think that in the long run, property prices will definitely have risen.
Only 1% of investors would sell immediately if property prices fell considerably, and more than a quarter (27%) would look to buy more.
Two thirds of consumers questioned believe that property prices are set to rise over the next twelve months, with most predicting an increase of 3-5%.
Less than one in ten (9%) expect prices to fall, whilst one in five (20%) predict they will remain static. However, the majority (71%) accepted that prices could fall in the next year.
Adrian Coles, director general of the BSA, said: “Growth in residential property prices has largely been due to a wide selection of factors including low interest rates, lack of suitable housing stock, a buoyant economy and the ingrained desire in the British psyche to own property.
“Some commentators have cautioned that the market may be over reliant on consumers’ expectations that prices will continue to rise, however, our report puts paid to these fears.
“Consumers have a realistic view of the property market and house price expectations have not fuelled a price boom. For most, the primary motivation for buying a property is derived from the satisfaction of owning a home, rather than the financial motivations of capital appreciation.
“Reassuringly for those critics, the results prove that the majority of buyers have put considerable thought into their purchase and have entered the housing market with their eyes wide open.
“The findings suggest that households’ confidence in the housing market is robust and points to the stability of the market if house prices were to fall. There would need to be some shock to the wider economy, for consumers’ confidence in their ability to hold on to their property to be shaken.”
