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Housing market confidence hits 30-month high

by: Mortgage Solutions
  • 06/04/2010
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Housing market confidence hits 30-month high
Four out of five UK homeowners think that property prices will continue to climb over the next six months, according to Zoopla.

The proportion is the highest recorded by the property website’s survey in two and a half years.

Optimism around the housing market outlook is significantly improved from a year ago, when only 30% expected house prices to rise.

According to the survey, only 9% of homeowners believe that property values will fall over the next six months, while a further 10% expect prices to remain flat. The average growth predicted by those surveyed is for house prices to rise by 5.7% by October.
The current level of optimism bodes well for market activity, with transaction volumes expected to rise significantly over the coming months given the historically high correlation between the confidence level in the survey and market activity approximately three months later.

However, the availability of mortgage financing remains the main obstacle to a sustained improvement in the housing market with four out of five (78%) of those surveyed saying that it is now easier to obtain a mortgage than it was three months ago.

The upcoming election is also a clear factor in terms of current market activity with 23% of those surveyed stating that they will wait to assess the outcome of the election before making any property-related decisions.

Nicholas Leeming, commercial director of Zoopla, said: “With the bad weather behind us and the recent Stamp Duty relief introduced for first-time buyers, confidence in the property market has bounced back well.

“Despite the optimism, significant concerns remain around the supply of mortgages and whilst affordability levels are now higher than at any time in the past few years the lack of mortgage funding, especially for first-time buyers, remains the single biggest threat to a full housing market recovery.”

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