1st June 2015
Confidence in the property market has taken a hit despite the fact that interest rates were held again and average house prices continued to increase, claims new analysis.
The Halifax Housing Market Confidence Tracker, which runs a month behind, showed that in April, the headline House Price Outlook balance – the difference between the proportion of people that expect the average property price to rise less the proportion who think it will fall – slipped to +58, compared with +64 in March.
The lender’s research also highlighted that the net proportion of consumers who now believe the next 12 months will be a good time to buy has increased from +21 to +26 in April. Conversely, the net proportion who think that the next year will be a good time to sell has fallen from +33 to +30.
It also found that just over three in five people, at 63%, expected the average property price to be higher in one year’s time – which is significantly lower than the 67% who said this in March – despite a number of positive short term factors.
These include the emergence of record low mortgage rates, falling swap rates, GDP growth falling to its slowest pace in three years and ONS figures showing negative inflation of 0.1% in April. MPC minutes also showed a unanimous vote to keep rates on hold at 0.5% in the latest meeting.
Halifax believes these, along with other factors, such as rising employment levels, should start to see the consumer housing outlook improve over the next few months.
Craig McKinlay, mortgages director at Halifax, said: “With inflation now at its lowest level since records began, unemployment falling, and the economy still growing, the fundamentals for the housing market remain positive. Going forward the key factor in how consumers adjust to any changes in rates will be the way in which they manage their disposable income.”