UK prices 'will rise by next year'
New research has found that confidence in the UK housing market is continuing to recover, with the majority of people thinking that prices will rise over the coming year – and with mortgage approvals a third higher than they were at the start of the year, the signs are pointing to a market recovery…
[ClickPress, Tue Jun 30 2009] New research has found that confidence in the UK housing market is continuing to recover, with the majority of people thinking that prices will rise over the coming year – and with mortgage approvals a third higher than they were at the start of the year, the signs are pointing to a market recovery…
An improvement in the market is very much linked to consumer confidence so research showing an increase in confidence can only be a positive sign for the market.
A new online survey by Propertyfinder.com has revealed that more than half of respondents were certain that UK property prices would increase by June 2010. They did however feel that prices would only rise by a nominal amount – 0.6 per cent – but the growing confidence levels are in evidence.
The dramatic interest in mortgage approvals – up by one third compared to the start of the year – is also a good sign for the market. However, 57 per cent of people felt that mortgages were too expensive.
Many of the country’s leading mortgage providers increased their lending rates in June – with Nationwide Building Society pushing up the price of some of their offers twice in two weeks.
The rising cost has dampened some of the optimism seen in May, when 60 per cent of survey respondents believed UK property prices would rise in the coming 12 months.
Nicholas Leeming, Director of propertyfinder.com, said, “There is real anger out there about the failure of lenders to offer mortgage borrowers the rock-bottom interest rates that the Bank of England has tried to bring about.
“After rising to its highest level since the credit crunch began, confidence dipped as lenders' decision to ramp up rates prompted a borrower backlash.
“There is cause for optimism that we are past the worst, but the revival will be long and drawn-out if lenders don't change their ways.
“A reduction in the number of available properties has caused the recovery in confidence,” added Mr Leeming.
Stuart Law, Chief Executive of Assetz, agreed, saying, “All indicators now suggest that we have passed the bottom of the house price curve.
“While we can’t read too much into one set of figures alone, all the major indices and the recent RICS survey are all indicating an end to falling prices and an increase in activity.
“Extreme supply limitations and the recent introduction of some interesting new first time buyer mortgage products will help support market recovery and it is likely we will see a flurry of higher loan to value rates released as soon as it is widely recognised that the market has stabilised and the risk to the banking sector of further housing equity losses has diminished.
“I believe that my original prediction of minus five per cent price falls for the whole of 2009, although at the most positive end of commentators’ projections, is now looking too pesimistic.
“I expect to see a return to positive year-to-date growth for 2009 by the end of the summer, with an overall growth of around five per cent or greater.
“We expect further sustained recovery in 2010 with concerns over the effect of further job losses overstated in the face of current housing market conditions,” added Mr Law.
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Notes to editors:
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