Housing market confidence slips

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Published: Wednesday 15th October 2014 by The News Editor

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Consumer confidence in the housing market has fallen back to its lowest level in a year, a survey has found.

Some 68% of people questioned expect house prices to increase in the next 12 months, while 6% predict they will fall, according to Halifax.

The overall net balance of 62% expecting to see property values increase rather than decrease is the lowest seen since last summer.

Craig McKinlay, mortgages director at Halifax, said consumer confidence in the outlook for the housing market “seems to have reached a ceiling”.

The findings add to a string of recent studies which point to the housing market starting to enter a calmer period as it pauses for breath following a period of strong price growth.

In London, where house price growth has been particularly strong over the last year, the balance of people who think that the next 12 months will be a good time to buy a property, minus those who think it will be a bad time, is particularly negative, at minus 22%.

London is also the area where people are most likely to think house prices will continue to push up, with eight in 10 (79%) of people there expecting to see further growth in values in the coming months.

Across Britain, a balance of 11% of people think the next 12 months will be a good time to buy rather than a bad time and a balance of 19% of people think it will be a good time to sell a home rather than a bad time.

Optimism about buying a home was higher in areas where house price growth has been less fierce.

The outlook for buying a property was found to be at its most positive in the North East, where a net balance of 36% people think the coming months will be a good time to buy rather than a bad time. In Scotland this balance is 20% and in Wales it is 27%.

Being able to raise enough money to save for a deposit was cited as an increasing barrier to being able to buy a home, as was household finances.

One in five people also citied speculation about interest rates rising as a barrier to buying, which is unchanged from the proportion of people who mentioned this when the same question was asked three months ago.

Yesterday, the Office for National Statistics (ONS) said that UK house prices reached a record high of £274,000 on average in August after surging by 11.7% year on year.

But other reports have suggested that speculation over interest rate rises, tougher mortgage lending conditions and potential buyers baulking at some of the prices being demanded by sellers are prompting house price growth to weaken.

Published: Wednesday 15th October 2014 by The News Editor

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