Thursday, 11 April 2013

55% Think it's a Good Time to Buy as Housing Market Optimism Rises

Optimism in house price prospects has risen significantly over the past three months, according to the latest quarterly Halifax Housing Market Confidence tracker.
The survey, which was conducted during the week of the Government's budget announcement, revealed that the headline House Price Outlook balance (i.e. the difference between the proportion of people that expect house prices to rise rather than fall) stood at +33 in March. This was much higher than the +20 recorded in the last survey in December 2012 and is the highest since the survey began in April 2011.

More than four in ten (45%) respondents predict the average UK house price will rise over the next year. Only one in eight respondents (12%) forecast a decline in prices - the lowest proportion in the survey's history.

A significantly higher proportion think that it will be a good time to buy (55%) than believe that it will be a good time to sell (21%) in the next 12 months.  The proportion thinking that it will be a good time to sell has, however, risen significantly since the last survey in December 2012 (13%).

Despite the rise in those believing that it will be a good time to sell, fewer than one in six (16%) believe that it will be a good time to both buy and sell over the coming 12 months.

Concerns about job security (58%) and the challenges in raising a deposit (57%) are highlighted by respondents as the main barriers to buying a home. There has been a slight rise in respondents identifying challenges in raising a deposit from 55% in December 2012. The proportion identifying concerns about job security is unchanged from three months' ago.

Martin Ellis, housing economist at Halifax, commented:

"There has been much more optimism about the prospects for the housing market over the past few months, particularly as the recent UK budget announced big plans for housing, and this seems to be reflected in the attitudes of the respondents. Sentiment regarding the outlook for house prices has improved markedly over the past quarter. This is likely to reflect the modest improvement in house prices nationally over recent months. A clear north / south divide exists with significantly higher proportions of people expecting prices to rise in the south than elsewhere in the UK.

"Only a small number think that it will be a good time to both buy and sell over the coming months. This finding indicates that the level of housing market activity is likely to remain subdued in 2013 despite the growing optimism regarding house price prospects."

Ben Thompson, MD Legal & General Mortgage Club comments:

“The rise in house price optimism recorded by Halifax is a positive sign for the market as a whole. These results support the findings of our latest Mortgage Mood Survey which reveals that 70% of UK homeowners believe the current price of their property reflects its actual value.

“Value is all down to demand, so this belief that house prices are ‘fair’ highlights a shift to a more realistic attitude. Hopefully a combination of buyer and seller optimism, alongside a more diverse range of mortgage products, will help to drive a much needed boost in the market.

“These findings also indicate that price concerns are not the primary stimulus for the recent market stagnation. Issues surrounding the availability of suitable housing stock and the accessibility of appropriate mortgage finance need to be addressed if a true recovery is to take place.”