Consumer confidence towards house prices takes a hit

15th October 2014

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Following the rapid ascent in consumer confidence towards the UK housing market, sentiment towards the sector now appears to be cooling off claims Halifax.

According to the lender’s latest Housing Market Confidence Tracker, Britons’ conviction in property has collapsed to its lowest level in 12 months.

Halifax said the dip mirrors the small fall in confidence over the outlook for the economy in the coming year.

However despite the easing off of the exuberance, the overall picture for house prices remains relatively robust as the difference between those who think it is a good time to buy and those who think it is a good time to sell has converged, which points to a period of fairly stable house prices.

Craig McKinlay, mortgages director at Halifax said: “In the last three years consumer confidence in the outlook for the housing market has increased significantly. For the last year however, it seems to have reached a ceiling and, with speculation as the strength of the economy increasing in the last few months, confidence has fallen to its lowest level in 12 months.

“However, the national figures mask big regional differences, and more than half of people in London, at 55%, think the next 12 months will be a bad time to buy compared to compared to just over a third 37% of Britons overall.”

Notably this is the second consecutive quarter there has been a net negative figure for Londoners’ buying sentiment.

But regionally, those in London have the most positive outlook for the average UK property price, with nearly 80% expecting a rise in compared to 68% overall.

The most frequently mentioned perceived barrier to buying is being able to raise enough deposit, with 57% saying this is an issue. However, this has fallen from the 63% who said this one year ago, in the third quarter of 2014. In the last three months, the proportion citing household finances as a obstacle has risen 11%, from 28% to 39%.

Meanwhile, nearly 20% mention concerns about interest rate rises as a barrier to buying. Since the April to end of June period this year the research found there has been a significant decrease in the proportion expecting the average UK property price to rise over the next 12 months, from 71% in the second quarter of this year to 68% in the third. While the proportions expecting a small rise – up to 10% higher – have remained stable, the proportion expecting an increase of 10% or more but less than 15% has fallen, from 11% to 9%.

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