House price confidence 'improves'

Nearly a third of Britons predict house prices will rise in the next 12 months, according to a Halifax survey
12 April 2012

Optimism in the housing market has grown in recent months, with more Britons predicting prices will rise this year than those forecasting a fall, a study has found.

Nearly a third (29%) of those surveyed believe house prices will increase in the next 12 months, Halifax said, up from 28% when a similar report was compiled in October. Meanwhile 22% predict a decline, down from 30% when the study was conducted previously.

However, most people believe the market will be stable rather than see any sharp change, with two-thirds not expecting to see any increase or decrease of more than 5%.

Londoners are the most optimistic, having seen strong overseas buyer interest which could be boosted further by this year's Olympics, while people in the North East, an area particularly dependent on public sector employment, are the least.

Those expecting rises outweighed those predicting falls in eight out of 11 regions, compared with just three regions when the research took place in October, according to the latest housing market confidence tracker.

Martin Ellis, housing economist at Halifax, said: "The modest improvement in consumer confidence in the outlook for house prices reflects the resilience of the UK housing market over recent months in the face of a weak economic recovery and the deterioration in the outlook for both the UK and global economies."

Worries about job security and problems raising a deposit are seen as the main hurdles to buying a home, with squeezed household finances and restricted mortgage availability also featuring highly in the study.

This comes despite recent research from Halifax which found that mortgage payments for new borrowers have become their most affordable for 14 years. Lenders have been expanding their mortgage ranges and offering some of their cheapest ever deals, but concerns have been raised that they will tighten their borrowing criteria amid the weak economic backdrop.

Half of those surveyed said it was a good time to buy while only one in 10 believed it was a good time to sell. The rental market has seen a boom as those who have been unable to get on the housing ladder have remained trapped in the rental sector. Six out of 10 of the 2,009 adults surveyed believe the cost of private rents will see a further increase over the next year while 3% think they will fall.

Alongside London, the East Midlands and Yorkshire and Humber are positive about the year ahead. People in the West Midlands are feeling optimistic, as are those in Scotland, Wales and the South East. However their counterparts in the South West, North East and North West are feeling gloomy.

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