Confidence in the strength of the UK housing market remains at a low, according to the latest research from Halifax, with more people predicting a fall in prices than a rise.
30 per cent predict that the national average house price will decline over the next 12 months. However, 28 per cent think that prices will rise over the same period.
Nonetheless, the majority of respondents expect any change in house prices over the next year to be relatively modest with 57 per cent expecting any movement to be between plus five per cent and minus five per cent. Furthermore, more than a quarter (27 per cent) think that house prices will be unchanged in a year’s time.
The only three UK regions with a positive headline House Price Outlook balance (i.e. indicating that more people expect house prices to rise rather than fall) are in southern England. Londoners are most optimistic with an overall net balance of +13, followed by the South West (+3) and the South East (+1). In contrast, those living in Scotland are the most pessimistic about the outlook for house prices (-17).
Over half (57 per cent) cited concerns over job security as one of the main obstacles to buying a home (up five points on April). A quarter (25 per cent) also identified worries over household finances as a key barrier to house purchase (down six points).
Current conditions in the UK mortgage market continue to weigh on buyers with 57 per cent believing that concerns over being able to raise a deposit are a major barrier to home buying (up seven points).
More people believe that it is currently a buyer’s market with 53 per cent of all respondents thinking that it is currently a good time to buy. This is more than four times the proportion thinking that it is a good time to sell (13 per cent). These sentiments have hardened significantly over the past six months.
Now, only nine per cent of adults, and the same proportion of owner-occupiers, think the next twelve months will be a good time to buy and a good time to sell.
Martin Ellis, housing economist at Halifax, commented: “It is unsurprising that confidence in the housing market has been shaken a little over the last few months given the increasing uncertainty about the current economic environment, together with pressure on householders’ finances from weak earnings growth, higher inflation and tax rises. However, despite this deterioration in sentiment, record low interest rates continue to help to support the market. House prices nationally have changed little overall since the start of the year and we expect little change in both prices and activity over the next few months.”
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