Consumers more confident about house prices than economy

29th January 2016

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Confidence in the economy may be cooling but Britons are still positive about the housing market.

 

The latest quarterly Halifax housing market confidence tracker shows despite steadily falling since May, house price optimism in the final quarter of 2015 continued to show the majority of people believe that average UK property prices will move higher over the next 12 months (and 13% believe prices will be 10% higher.

 

However, the number of people who believe that Britain’s general economic conditions will improve over the next 12 months has dropped.

 

Craig McKinlay, mortgages director at Halifax, said: ‘Solid economic growth, rising real earnings and falls in already very low mortgage rates are all stimulating housing. At the same time, there is an increasingly acute imbalance between supply and demand, which is causing property prices to rise at a robust pace.

 

‘The situation, which is unlikely to reverse significantly in the short-term, is reflected in the public’s continuing high levels of optimism regarding house price growth over the coming 12 months.’

 

Due to this imbalance there has been an increase in the number of people who believe the next 12 months will be a good time to sell – 55%. This is compared with 29% of people who think it will be a bad time to sell.

 

The proportion who believe it would be a good time to buy and sell a property has increased to 39% while 15% of people think it would be a bad time to do both.

 

Rising property prices are a barrier to entry when it comes to buying a home and 37% of people think it is a problem, up six points on the previous quarter and the highest figure since the survey’s inception.

 

The average UK property now costs £208,286 following a 10% increase in 2015.

 

However, raising a deposit is the main barrier to buying property with 58% of people choosing this as the reason. Job security is the number two reason for being unable to get onto the property ladder.

 

‘Difficulties in raising a deposit, concerns about job security and high property prices remain the main barriers to people buying a home,’ said McKinlay.

 

‘The proportion identifying rising prices has risen to the highest in the survey’s history. The decline in affordability that this highlights is expected to dampen housing demand and property price growth over the medium term.’

 

 

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