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Quarter of Brits expect house prices to rise 5% in a year

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Posted:
13/07/2013
Updated:
13/07/2013

A quarter of Brits predict the average UK house price will rise by 5% over the next 12 months.

According to the latest quarterly Halifax Housing Market Confidence tracker, more than half of British adults predict the average UK house price will rise over the next year by at least some amount – an increase of 7 percentage points since March and 25 points since June 2012.

Londoners are the most optimistic with nearly three-quarters expecting a rise. Those living in the North West are the least optimistic with just over a third predicting that the average price will rise. 

Half (50%) of Londoners expect house prices to rise by 5% or more over the next 12 months – double the UK average (24%). This is a substantial increase from 20% in the first quarter of 2013 and 18% a year ago.

Martin Ellis, housing economist at Halifax, said: “Sentiment regarding the outlook for house prices has improved markedly over the past quarter, continuing the trend seen since late 2012.

“This increase in optimism is partly due to house prices being stronger than expected in the first half of the year. We continue to see a clear north/south divide with significantly higher proportions of people expecting prices to rise in the south than elsewhere in the UK.

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“Nonetheless, the market still faces substantial headwinds with, for example, house prices remaining above the historical average in relation to earnings. Such factors are likely to prevent a sharp acceleration in house prices.”

The report said the various initiatives designed to stimulate the market such as the Funding for Lending scheme, New Buy and Help to Buy equity share schemes ‘appear to be working’.

The report also found that there is a significantly higher proportion of people who think that it will be a good time for people to buy (57%) than believe that it will be a good time to sell (30%) in the next 12 months.

Just under a quarter (23%) believe that it will be a good time to both buy and sell over the coming 12 months. This compares with 16% three months’ ago.

Worries over job security and raising a deposit remain key obstacles to buying a house, with 64% of respondents highlighting this as one of the main barriers to buying a home compared with 67% in Q1 2013. The proportion identifying concerns about job security has stayed unchanged at 58%.