Hopes of a housing market revival have been raised by surveys showing that it is easier to secure a mortgage than at any time in the past four years, although debt remains a major worry among households.
The Building Society Association (BSA) found in its Property Tracker Survey that “consumers are finding it easier to access mortgage finance than at any time since the [survey] started in June 2008”. About 45pc of respondents said mortgage access was a barrier to home ownership in December, compared with nearly 60pc last year.
The improvement came alongside evidence that fixed-rate mortgages are the cheapest they have been since summer 2007, just before the credit crunch struck.
According to the National Mortgage Index from the Mortgage Advice Bureau (MAB), five-year fixed-rate deals average 4.57pc, the lowest in five years, and two and three-year deals are “more attractive than at any time in the past nine months”.
The deals are convincing nine in every 10 buyers to lock in their mortgage costs, more than has been seen since 2009, MAB added. First (Other OTC: FSTC - news) -time buyers are also benefiting from lower rates and better deals for borrowers with small deposits.
“Prices have also fallen for higher loan-to-value [LTV] products,” MAB said. It also found that the average LTV ratio had risen back above 70pc in November (Xetra: A0Z24E - news) . However, the average size of deposits last month was 16pc higher than in 2011, at £63,779.
The BSA research confirmed that saving for a deposit remains the biggest obstacle for buyers, with 59pc citing it as a barrier. Conditions have improved, though. Last year, nearly 70pc of buyers said it was a major hurdle.
A separate survey by the Bank of England, however, revealed the pressure on households as they try to save enough for a mortgage and meet mortgage repayments.
The bank's household spending survey , conducted by NMG Consulting, showed that half of households claimed to have been affected over the last year by austerity. The poorest had suffered the most and confirmed that real household incomes after adjusting for inflation have contracted again this year.
Households are saving about 7pc of their pre-tax income to cut their debts, with the young saving proportionately the most as they try to raise a deposit to buy a home.
But debt, and mortgage debt, was a worry for households, with 12pc of respondents saying that they were 'very concerned' about debt while a further third were 'somewhat concerned'. Anxieties about debt levels were greatest among households with high loan-to-value mortgages, according to the survey.
With households worried about debt levels and the Government's austerity measures, the survey found that 78pc of those who expressed concern about their debts had cut spending.
Meanwhile, 10pc of households had got financial help from families and a fifth had started working longer hours or gor a second, or better-paid, job.