Is now really a good time to buy?

More people think that it is now a good time to buy property in the UK, according to the latest Property Tracker survey from the Building Societies Association.

But is it really a good time to put your faith in property? According to the survey, it is in part the increasingly optimistic reports regarding the future house prices that are driving expectations. So, if surveys are affecting surveys, just how useful are they?

59% of respondents agree to some extent that now is a good time to buy residential property in the UK, compared to 54% in March this year. This proportion has grown consistently since June last year, when just 27% believed it was a good time to buy property. In contrast, just 20% disagree that now is a good time to buy property.

And half of the respondents thought that house prices will have risen in a year’s time, a sentiment probably affected by recent figures from several financial institutions and associations showing an upward trend.

Commenting on the survey’s findings, Paul Broadhead, Head of Mortgage Policy at the BSA said:

“There have been a number of encouraging signs that the worst of the property crash has passed recently and the Property Tracker shows that people think both that property prices will now rise and that now is a good time to buy. However, improving job security will be key to any substantial recovery of the housing market.”

“People clearly recognise that with both property prices and mortgage rates having fallen, there are potential bargains to be found meaning that now is a good time to buy. However, for many, concerns over job security mean that they are unlikely to actually go ahead and buy. They will need to see confidence in the jobs market return before they make their move in the property market.”

Of course, it is true to say that the market has seen improving affordability due to house price falls and cuts in mortgage interest rates, but the interest rates on fixed rate deals are now moving upwards again, with Abbey and Cheltenham and Gloucester being just two of five bank to push up rates in the last fortnight.

TotallyMoney.com wonders if there is a danger that month on month figures can lead to undue optimism when all of the year on year figures show that a recovery is still a long way off. For example, the Council of Mortgage Lenders today reported that gross mortgage lending declined 2% last month. This might not sound too bad, but it’s a 58% fall from May 2008, and perhaps it is this figure that should be hitting the headlines.