Confidence in the outlook for house price growth remains robust despite the higher proportion of people worried about an interest rate rise, Halifax says.
The latest quarterly research from the lender shows that 68 per cent of Britons are now expecting the average property prices to be higher in 12 months’ time and just 5 per cent are expecting lower prices.
Continued talk over the likely timing of an interest rate rise has seen a spike in the number of people who expect both mortgage and savings rates to be higher in 12 months’ time. The latest Tracker shows 58 per cent now believe mortgage interest rates will be higher in the next 12 months, compared to 48 per cent in the second quarter. Over a third (35 per cent) now believe savings interest rates will be higher (up from 26 per cent in Q2).
Craig McKinlay, mortgage diector at Halifax, said:
“While economic optimism appears to have tailed off in the last quarter, house prices have continued to increase and the underlying pace of house price growth is strong. This has helped to maintain the expectation that house prices will continue to rise, despite more people expecting interest rate rises in the next 12 months.
“The factors behind the upward pressure on house prices include the continued lack of second-hand properties for sale on the market and the availability of low mortgage rates. Without an increase in supply it’s likely to mean that house price growth continues to be robust in the short-term, even if interest rates eventually begin to increase.”
Barriers to homeownership
Raising a deposit is still seen as the number one barrier to buying property (57 per cent mention this) despite the availability of higher loan to value mortgages and the Help to Buy Scheme.
The number of people citing job security as a barrier has fallen to its lowest ever level (42 per cent) but it is still the second most mentioned factor, ahead of household finances (36 per cent).
Despite the continued rise in house prices, the percentage citing rising prices or prices being too high has fallen from 35 per cent to 31 per cent in the last three months.
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