Confidence in the UK housing market stabilises

Halifax reports renewed confidence in the market following a period of decline (Photo: Archant)

Halifax reports renewed confidence in the market following a period of decline (Photo: Archant) - Credit: Archant

Confidence in the UK housing market has stabilised after a record period of decline, a new study has revealed.

The latest Halifax Housing Market Confidence Tracker showed that 58 per cent of respondents expect prices to rise over the next 12 months, compared to 14 per cent who predict they’ll fall.

The majority (30 per cent) believe prices will rise by less than 5 per cent, while 19 per cent expect an increase of 5-10 per cent. 23 per cent think prices will remain the same however, while 7 per cent predict a fall of up to 5 per cent.

House price optimism peaked in May 2015 around the time of the General Election, when 72 per cent of people predicted a rise in house prices.

Martin Ellis, Halifax housing economist, said: “House price optimism is little changed since the October 2016 measure, which is significant because it was the first post-Brexit survey and recorded the steepest fall since the tracker began. The latest results suggest that consumer confidence in the housing market is potentially settling into a new lower ‘normal’.

“This sentiment echoes the slowdown in the annual rate of house price growth, which has more than halved over the past 12 months.”

But while more than a third (38 per cent) believe the next year would be a good time to buy and sell, confidence in the wider economy has fallen sharply.

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Martin Ellis added: “We are seeing a renewed drop in confidence amongst consumers regarding the general economic outlook, which is coinciding with the UK Government starting its two-year period of EU exit negotiations.

“The gap between house price optimism and economic optimism has only been bigger once – March 2016 – indicating that whilst there is greater consumer uncertainty over the wider economy, confidence with the housing market is holding up well, possibly due to other factors such as a shortage of available housing.”