This article is an external press release originally published on the Landlord News website, which has now been migrated to the Just Landlords blog.
An encouraging new report from the Halifax indicates that house price confidence is undeterred by the threat of interest rate rises.
The number of people who expect both mortgage and savings rates to be greater in 12 months time increased during the third quarter of 2015. Latest Tracker data shows 58% of homeowners believe mortgage interest levels will be higher, in comparison to 48% in Q2. 35% expect savings interest rates will also rise in the next year, up from 26% in the second quarter of this year.[1]
Optimism
Annual house price inflation currently stands at 9%, with the average UK house price at £204,674. House price optimism has risen slightly, from 63% in Q2 to 64% in Q3. 68% of Britons now expect the average property price to be higher in 12 months’ time, with just 5% believing that it will be lower.[1]
In addition, there has been a drop in the proportion of British property owners that think it will be a good time to buy in one years’ time, slipping to 53% from 56%. There has also been a fall in selling sentiment, with people who feel that the next 12 months represents a good time to purchase homes down to 52% from 59%.[1]
Barriers
Raising a deposit was still found to be the top barrier for those looking to purchase a home, with 57% citing this as the main reason. Job security (42%) and household finance (36%) were the next most common barriers.[1]
Despite house prices continuing to rise, the percentage of people stating that house prices are too high has dropped to 31% from 35% during the last three months. Homeowners who cite possible interest rate rises as a barrier to buying a new home have dropped to 14% from 16% in Q2.[1]
By region, Londoners have a low buying sentiment, with just 40% saying that they feel the next year will be a good time to buy. By contrast, 77% of people in Scotland and 58% in the North of England feel that the next 12 months represents a good period to purchase property.[1]
House price confidence unwavering
However, 64% of Londoners believe that the next 12 months will be a good time to sell, in comparison to 48% in Scotland, 47% in the North and 43% in the Midlands.[1]
Expectations
Craig McKinlay, Mortgage Director at the Halifax, stated that, ‘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.’[1]
‘The factors behind the upward pressure on house prices include the continued lack of second-hand properties for sales 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,’ McKinlay added.[1]
[1] http://www.propertyreporter.co.uk/property/house-price-confidence-remains-high.html
