Weekend read: Santander, HSBC tell two tales about the UK’s property market

LONDON | With 8% of Britons or 3.7 million considering they are likely to successfully purchase a new home in 2012, Santander says the UK shows increased confidence in the property market. However, HSBC looks at the 12% who plan to buy or sell in the first six months of the year and sees a housing stagnation scenario for 2012.

HSBC Moving Home Survey found that of 88% householders not looking to move, 61% are aged 55+ and feel happy with their current property. Contentment felt by older home owners was mentioned as one of the reasons that will limit the amount of available housing stock, but the lack of buy and sale activity in the market is set to be prolonged by the financial obstacles facing younger Britons.

Of those people aged 34 and under who are not planning to buy or sell a property, the main explanations include having an insufficient deposit (29%), concern about not getting a mortgage (15%) and fears about employment prospects (14%). 10% said they simply did not wish to own a home, suggesting a reverse in the home ownership aspirations of this age group.

For people aged 55+, selling a property involves plans to downsize (36%) and release some, or all, of the equity held within it (33%).

Peter Dockar, HSBC Head of Mortgages, said:

“Our research suggests that the current economic climate is of particular concern to younger people who either want to get on the housing ladder or move on to a larger property.”

The Council of Mortgage Lenders (CML) forecasts that lending will fall this year. Selling homes will be especially popular in north-west England, where 8% of people are hoping to move home. Buying homes will be popular in Scotland (9%), London (10%) and south-east England (9%). Purchasing buy-to-lets looks set to be more common in north-west England (4%), the West Midlands (3%) and London (4%).

On the other side of the road, talking to researchers from Santander Mortgages, 53% of potential buyers appear to feel more positive about their prospects in 2012.

Santander believes Britons are relatively upbeat about the property market for 2012, and this is confirmed by the news from the CML, which reports slightly more positive data for the industry with a 4% rise in mortgage completions in November, compared to October. Also consistent with the CML’s recent data is the fact that younger people are the most likely to buy, with 12 per cent of those aged 18-34 saying they are likely to purchase a new home. This is compared to 7 per cent of 35-54 year-olds and 5 per cent of those aged 55 or over.

Overall 53 per cent of those planning to buy a home are more positive about their prospects of being able to do so than a year ago, compared to only 15 per cent who are more negative.

By region, Santander data coincides with HSBC’s in that Londoners are the most confident about their chances of purchasing a home this year, with 13% responding it is likely they will do so. The Spanish bank found that of those who are likely to buy a new home this year, roughly a quarter (24 per cent) will be first time buyers.

Santander registers that homeowners are relatively optimistic about house price rises in 2012, with 29 per cent of them anticipating an increase in the value of their property over the next 12 months, compared to just 17 per cent predicting a fall in value.

Phil Cliff, Director of Santander Mortgages, commented:

“It’s been a tough few years for the property market overall, but prices have made a steady recovery so there’s every reason to feel cautiously optimistic. There are however, still a number of obstacles out there facing potential buyers, including securing the required funds.”

So, where is the turning corner at which Santander and HSBC run towards very different conclusions? At Q3 2011, Santander’s share of new mortgages was 16.5% representing over one in six new mortgages. Not bad at all for a financial entity with a name that most Britons had never even tried to pronounce, and proof of how uncomfortably its UK competitors sit next to such a greedy newcomer.

About the Author

Victor Jimenez
London contributor at thecorner.eu, reporting about the City and the Eurozone economies. He regularly writes for Spanish newspaper group Prensa Ibérica--some of his features include shared work with journalists of The Daily Telegraph and the BBC.

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