Following the UK government’s efforts to stimulate the housing market during the pandemic with a stamp duty tax break, there is once again a call from homeowners to provide support measures ahead of the Budget next week.

When homeowners were asked what they would like to see from the government to improve market conditions, the top choices are extending the mortgage guarantee scheme (30%), increasing funding for first time buyers (28%), and expanding financial support for other affordable housing initiatives (28%).

Greater support wanted from the government

These requests follow many homeowners currently being deterred from moving again by recent economic headwinds. Almost six in ten homeowners (58%) are unlikely to move or sell again within the next five years, with Smoove’s research showing that economic challenges seem to be the principal cause of people’s hesitance to move again. The rising cost of living (32%), high mortgage rates (28%), and stretched housing affordability (11%) are cited as the main setbacks.

These factors have caused a lending crunch for homeowners, as the average mortgage value has dropped from £221,047 to £174,867 over the past six months. According to Smoove’s data, the number of home buying purchases falling through remains at 35% of transactions, up from 34% last year.

Waiting times for people buying a home have increased slightly too. Smoove’s data reveals that, over the last six months, the average waiting time between instruction and completion when purchasing a home has increased by 4% from 153 days to 159 days, equivalent to over five months.

Nevertheless, while house prices have fallen slightly from pandemic levels, they remain high by historical standards and are rising faster than wage growth. According to Smoove’s data, the average purchase price for buyers over the last six months has risen from £288,238 to £316,497, an increase of 9.8%.

Although house price growth is expected to slowdown in 2023, some UK households remain optimistic. Over a third of homeowners (39%) believe house price growth will increase in the next three months, rising to 43% of homeowners over the next six months and 51% of homeowners over the next twelve months, increasing on average by 4.4%.

Jesper With-Fogstrup, CEO, Smoove, which carried out the research, said: “After a significant period of uncertainty over the last few months, it is understandable why many are looking to the government for further support. However, it is clear from our research that shifting circumstances have not deterred the positive attitude of homeowners looking ahead, many of whom retain an optimistic outlook in relation to future house price growth.

“Meanwhile, albeit at higher levels than many are accustomed to, some lenders are beginning to tailor their mortgage product offerings to reflect the new market conditions. The economic picture, while complex, is also brightening, with inflation expected to continue in its downward trajectory this year, easing the strains on both buyers and sellers.”