9 out of 10 still believe in home ownership

But most feel thwarted by the credit crunch

The vast majority of Britons still want to invest in homes of their own despite the current economic situation, according to a new YouGov survey commissioned for the New Homes Marketing Board (NHMB).

However, the current climate is serving to thwart home ownership ambitions, with 60% of respondents who have put their plans on hold citing difficulties in either obtaining a mortgage or saving the larger deposits now required.

Aspiring buyers also want more Government help. Some 61% of respondents wanted mortgage interest tax relief; 59% supported the introduction of a Government-backed savings scheme; 45% urged Stamp Duty relief and 58% called for an interest rate cut.

The good news for the UK’s struggling house builders is that underlying demand remains healthy with 70% of those who are delaying their plans to buy saying they still plan to buy a home when the market and mortgage availability improve.

In fact, nine out of ten people believe that buying their own home is a sensible investment in the medium or long term.

Speaking today, David Pretty CBE, chairman of the NHMB said: “Our survey shows that underlying demand for home ownership remains very strong. In today’s cooling market buyers should be able to take full advantage of lower prices and better deals.

“It’s ironic, however, that so many are prevented from doing so by the current shortage of mortgages, which cannot even satisfy current demand, as well as by higher rates of interest and the need for much larger deposits.”

Mr Pretty also warned that the problems now facing the property market could drive pent-up demand to dangerously high levels. He said: “So many people are having to put their plans on hold that the housing backlog across the country, which has been substantial for some years, could soon be approaching 1 million - that’s four times the Government’s annual new housing target for England and ten times the number of new homes likely to be built this year.

“Sooner or later the current economic downturn will ease, and when it does, this unsatisfied demand will be released into a market which will not, in the short term, be able to satisfy it. The result could well be strong upward pressure on house prices once again, and that certainly won’t benefit home buyers.”

Mr Pretty added: ‘’Current problems in the housing market are essentially the result of the lack of liquidity in the financial markets rather than simply a cooling housing market and reduced demand. As our poll shows, this lack of mortgage finance is artificially reducing the market well below even current demand. This is having serious consequences both for the housing industry but also many thousands of buyers, particularly first-timers.”

He said the industry is urging the Government and the Council of Mortgage Lenders to do everything to improve liquidity and mortgage availability, adding: “There is still much that could be done to help buyers, particularly the beleaguered young first-timers. In 2006, I said first-time buyers were becoming an endangered species – yet now their situation is even more parlous and urgent help is needed to give them some relief.

“I am again calling for first-time buyers to be exempt from Stamp Duty up to £250,000. Stamp Duty has become a totally unfair tax on those who can least afford it. I am also repeating my call for the setting-up of a National Homes Deposit Savings Scheme. This will actively encourage youngsters to save for their deposit well in advance, with a 25% tax free contribution from Government on top of their savings [see below]."

He added: “These measures will not in themselves solve the current crisis but will be a great boost to the confidence of first-time buyers, helping them to take advantage of the present market conditions, and could well be a first step on the road to a housing recovery.”

Click here to access this press release in full and the YouGov survey results online.

Email:newhomes@hbf.co.uk

Editor's notes:

All figures, unless otherwise stated, are from YouGov Plc. The total sample size was 2,327 GB adults. Fieldwork was undertaken from 26th – 30th June 2008. The survey was carried out online. The figures have been weighted and are representative of all GB adults (aged 18+)

Detailed survey results can be seen here

Action the NHMB believes should be taken includes:

Immediately exempting first-time buyers from Stamp Duty up to a threshold of £250,000, which takes into account house price inflation over the last 15 years.
Rapid creation of a Government-backed National Homes Deposit Savings Scheme for first-time buyers in which participants are rewarded with a 25% tax-free bonus upon reaching a savings target of £20,000 (in five years or less).
An immediate cut in interest rates. The threat to the wider economy posed by the housing market downturn is such that it currently outweighs concerns over inflation.

New Homes Marketing Board

The New Homes Marketing Board (NHMB) was established in 1982 by the Home Builders Federation (HBF) to promote the need for new housing to the general public and raise awareness of the benefits of new homes. The NHMB is supported by HBF members and the majority of home builders registered with the National House Building Council, as well as material producers, suppliers, and associated industries. See www.nhmb.co.uk

David Pretty - Background

David Pretty is the former CEO of Barratt Developments PLC, and was made a CBE for services to house building In the Queen's Birthday Honours List 2007. He is a Director of the Home Builders Federation (HBF), Chairman of the New Homes Marketing Board, a trustee of The Prince’s Regeneration Trust and an appeal board member of Shelter, the homelessness charity. He is also a non-executive Director of McCarthy & Stone, the retirement house builder. He has for many years campaigned to highlight the causes of the housing shortage and the plight of first-time buyers. He contributes regularly to trade publications and is an occasional advisor to Government and financial institutions on housing issues, and is currently jointly heading the Killian-Pretty Review into the planning applications process.

New Homes Marketing Board

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