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House price consumer sentiment cools

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16/10/2014
Consumer confidence in the housing market has fallen to its lowest level in 12 months, according to the latest quarterly Halifax Housing Market Confidence Tracker.
House price consumer sentiment cools

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

However, Halifax said the overall picture for house prices remained relatively robust as the difference between those who thought it was a good time to buy and those who thought it was a good time to sell had converged, which pointed 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 to 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 (55 per cent) think the next 12 months will be a bad time to buy compared to compared to just over a third (37 per cent) of Britons overall.”

Regionally, those in London have the most positive outlook for the average UK property price, with eight in 10 (79 per cent) expecting a rise in compared to seven in 10 (68 per cent) overall.

Halifax found the most frequently mentioned perceived barrier to buying is being able to raise enough deposit, with 57 per cent saying this is an issue. However, this has fallen from the 63 per cent who said this a year ago. In the past three months, the proportion citing household finances as a barrier has risen 11 percentage points from 28 per cent to 39 per cent.

The dip in confidence is in contrast to the most recent figures from the Office of National Statistics which showed that house prices are up 11.7 per cent in the year to August 2014 with London prices rising almost 20 per cent in the past year.

However, Knight Frank warned this week that the UK can expect house price inflation to slow to 3.5 per cent next year as the general election and an interest rate rise creates caution among investors and homeowners.

Knight Frank’s housing market monitor forecasts that housing market growth in the UK will be 6 per cent by the end of the year.

 

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