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Consumer confidence in housing market falls slightly

Oct 27, 2017

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Confidence in UK house prices has fallen to its lowest level since December 2012, according to the latest Halifax Housing Market Confidence Tracker although more consumers are still expecting a house rise than fall.

The survey, which tracks House Price Optimism (HPO1) – consumer sentiment on whether house prices will be higher or lower in a year’s time – has dropped 14 points from April 2017 to October, matching the record fall seen following the EU referendum result.

The index has also fallen by 38 points since its peak in May 2015 around the time of the General Election.

Half (50%) of those surveyed now expect house prices to rise over the next year, the lowest level since April 2013, whilst one in five think house prices will fall, the highest point since October 2012.

Despite expectations of a Base Rate rise, an increase is not perceived as the main barrier for people in general to buy a house. Instead, the ability to raise a deposit (61%) and job security (42%) remain the main barriers, with household finances recording the biggest increase since the last survey.

When asking existing mortgage borrowers about their concern in rising interest rates affecting their ability to meet their repayments, only 36% show concern. This has decreased by six percent since 2014.

Russell Galley, Managing Director, Halifax Community Bank, said: “Housing market optimism has declined significantly over the past year, with almost half of people expecting a general slowdown in the market.

“Even with a potential base rate increase on the horizon, it’s significant that buyers’ concerns continue to be centred on raising deposits and job security and, as such, we do not anticipate that an increase in Base Rate will have a significant effect on the demand for properties.”

When it comes to the balance of people who think the next 12 months would be a good time to buy, London is the only region with a negative outlook of -3%, whilst people from the West Midlands and Wales are the most positive. Those aged between 16 and 24 are the only age group with a negative buying outlook at -15%, whilst those over 65 are the most positive.  Across the country over half (52%) of those surveyed think that it would be a good time to buy.