CONFIDENCE in the UK housing market remains strong, despite growing concerns over the wider economy, according to new research today.
The latest quarterly Halifax Housing Market Confidence Tracker showed that despite confidence declining steadily since May, the majority of people still believe that average UK property prices will be higher in 12 months’ time, with 13 per cent of people believing that prices will be at least 10 per cent higher. Halifax’s house optimism index from the final quarter of 2015 came in at +61 compared to +68 in May 2015.
But an index measuring people’s outlook for the broader UK economy over the next year dropped sharply to -1, compared to +26 in May 2015.
Despite the decline in confidence in the country’s finances as a whole, Craig McKinlay, mortgages director at Halifax, was bullish about the property market in the year ahead.
“Solid economic growth, rising real earnings and falls in already very low mortgage rates are all stimulating housing,” he said. “At the same time, there is an increasingly acute imbalance between supply and demand, which is causing property prices to rise at a robust pace.”
The number of people who think it would be a good time to buy or sell property has risen by three points to 39 per cent, while 15 per cent of people think the next 12 months would be a bad time to do both.
Deposits are still seen as the main barrier to buying a home, with 58 per cent of people seeing this as a key challenge, followed by job security at 42 per cent.
Rising property prices were identified as a barrier to buying a property for a record 37 per cent of respondents. This reflects the fact that average UK house prices now stand at £208,2863 following a 10 per cent increase during 2015.
“The decline in affordability that this highlights is expected to dampen housing demand and property price growth over the medium term,” said McKinlay.