Confidence in the UK housing market has fallen to its lowest level in five years, new research has revealed.
According to the latest Halifax Housing Market Confidence Tracker, one in five people think house prices will fall, the lowest since December 2012.
Consumer optimism on house dropped from 44 points in April to 30 points in October, matching the record fall seen following the EU referendum result.
Most economists are expecting the Bank of England to raise interest rates this week for the first time in more than 10 years to combat rising inflation.
However, an interest rate rise is not seen as the main barrier for people in general to buy a house.
Instead, the ability to raise a deposit is seen as the biggest problem, according to 61% of respondents.
When asking existing mortgage borrowers about their concern in rising interest rates affecting their ability to meet their repayments, only a third (36%) show concern.
London is the only region with a negative outlook, with people from the West Midlands and Wales the most positive.
Those aged between 16 and 24 are the only age group with a negative buying outlook.
Across the country, over half (52%) of those surveyed think that it would be a good time to buy.
Russell Galley, managing director at Halifax Community Bank, said: “Housing market optimism has declined significantly over the past year, with almost half of people expecting a general slowdown in the market.
“Even with a potential base rate increase on the horizon, it’s significant that buyers’ concerns continue to be centred on raising deposits and job security and, as such, we do not anticipate that an increase in Base Rate will have a significant effect on the demand for properties.”
The fall in confidence coincides with growing concerns around the health of Britain’s wider economy.
The Economic Optimism Index, a separate survey by Ipsos MORI, continues to deteriorate, with the balance of people who believe UK economic conditions will improve over the next year down at -31, its lowest level since January 2012.
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