A shortage of homes for sale is emerging as the biggest barrier to house hunters as the availability of mortgages and selling a home become less difficult according to the results of new research.

The findings of the Barratt Home Buyers study of 2,275 homebuyers in Britain, has revealed a significant shift in market perceptions compared with a year ago with fewer people citing finance issues and selling their own home as difficulties.

The ability of homebuyers to find a suitable property has deteriorated and is now cited by 30% of respondents as difficult. It is only seen as easy by 5% of those surveyed.ii A third (32%) of homebuyers reported that they have now been looking for a house for over six months.

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A year ago, raising a deposit (39%), finding a mortgage (30%) and selling a home (35%) were the main difficulties most often cited by the Barratt respondents.iii In the latest findings those experiencing difficulties finding a mortgage have halved (15%) as have those experiencing difficulties selling an existing property (17%).

Buyers appear to have caught up quickly with the fact that mortgage lending is improving. However, they are now starting to overestimate the size of the deposit required and in some cases are doing so by a factor of three.

First Time Buyers in the study are on average expecting to put down a 15% deposit which would equate to around £25k based on the average Barratt First time buyer price of around £165,000. However, a more realistic deposit requirement is now 10% (£16,000 on Barratt first time buyer price) and as low as 5% or £8k under the NewBuy scheme.

The NewBuy scheme is not as well understood as it might be. Nearly two thirds (65%) of homebuyers said that they were unaware of a tax-payer backed mortgage scheme. More encouragingly 12% of the sample were aware and intended to use the scheme. Barratt has indicated that it expects 10-15 % of sales to use this low deposit scheme.

(CD/GK)