Yorkshire Bank’s latest Housebuyers report found confidence in house prices is at an 18-month high. More than half of those surveyed (55 per cent) expect to see rising prices in 2006 – a nine per cent increase on last January.
This is also the highest figure since June 2004, when 66 per cent were predicting an increase in prices.
A further indication of an improving mood in the housing market is that one in five (21 per cent) buyers would be willing to offer above the asking price on a property they really wanted. Twelve months ago, only one in eight (13 per cent) would have done so.
Gary Lumby, Yorkshire BankÂ’s head of retail, said: “The market has been showing some encouraging signs of growth in the last few months. House prices have been rising – albeit modestly – and the number of mortgage approvals is up. In fact, the Council of Mortgage Lenders (CML) recently reported record December lending figures. This more positive outlook is being supported by expectations of a further cut in interest rates in the next few months.”
Yorkshire Bank also found sellers more willing to stand their ground in negotiations. One in six (16 per cent) sellers would be unwilling to accept offers under the asking price – a four per cent increase on three months ago.
Gary Lumby added: “Sellers are likely to benefit from the more robust market in the New Year. Rising house prices now mean they’re in a stronger position to hold out for the asking price on their property. And as prices are rising, buyers are beginning to feel more pressure to offer above the asking price. More people are looking to buy and so buyers are willing to submit higher bids to see off rivals.”
One factor deterring first-time buyers is the prospect of higher council tax. Yorkshire Bank found almost one in four (23 per cent) first-time buyers are putting off plans to buy until local councils announce their charges for the year ahead.
Nonetheless, first-time buyers are still more likely to be looking to buy. One in six (16 per cent) said market uncertainty had put them off buying in 2005 but are now looking to buy this year.
First-time buyers are also relieved that Gordon Brown announced in his pre-Budget statement in early December that he was abandoning plans to allow residential property to be included as part of self-invested personal pensions (SIPPs). Before this, one in four (24 per cent) first-time buyers said they would try buy before April 2006 – when the reforms were due to take place – as they feared competition with buy-to-let investors would drive house prices beyond their reach.
