Halifax

Consumer confidence heats up as house price growth slows

24 April 2015

The Halifax Housing Market Confidence Tracker monitors consumer sentiment towards the housing market. Data has been collected since April 2011 and this is the 19th survey wave.

Measure

March 20151

February 20152

March 2014

House Price Outlook

+64

+60

+65

Good time to sell

+33

+27

+24

Good time to buy

+21

+35

+34

Source: Halifax/ Ipsos MORI 1 survey conducted after the Autumn Statement; 2 Survey conducted before the Autumn Statement.

While house price growth continued to slow in March 2015, consumer confidence in the outlook for the housing market* has rebounded to its highest level since July last year, according to the latest quarterly Halifax Housing Market Confidence Tracker as measured by Ipsos MORI.

Consumer confidence in the outlook for the housing market has bounced back to a net balance of +64 in March from +60 in February. Conversely, house prices increases have slowed over the same period and in the three months to March this year house prices were 8.1% higher than in the same three months a year earlier, compared to 8.5% in January 2015, and 10.2% in July 2014.

As to just how confident consumers are in the outlook for the housing market over the next 12 months, a third (33%) are expecting the average property price to be higher by up to 5%, while a quarter (25%) anticipate increases of between 5% and 10%.

Craig McKinlay, Mortgages Director at Halifax, said:

“We’ve seen a strong start to the year in terms of the net sentiment regarding the outlook for the housing market, and this has translated into an increase in transaction volumes. This increase in optimism is likely to be the result of a combination of factors, including the improving economic figures, greater numbers of higher loan to value mortgages, and extremely competitive mortgage rates.”

Barriers towards homeownership

There has been an increase in the net proportion of consumers who believe mortgage interest rates will be higher in 12 months time (+41 compared to +35 in February). Nevertheless, only one in eight (12%) spontaneously cited concerns about interest rate rises as one of the main barriers to being able to buy a property; down from one in six (15%) in Q1 2014.

The main perceived barriers to homeownership are the ability to raise enough deposit (61%) and concerns about job security (44%). A year ago, 60% and 51% respectively identified these as among the main barriers.

Craig McKinlay adds:

“The results highlight that an increasing number of consumers believe interest rates will begin to rise in the next 12 months, but at the same time it is falling as a perceived barrier to homeownership. This is perhaps a result of rising incomes and the current low mortgages rates. The fact that consumers’ ability to raise a deposit remains the greatest perceived barrier to homeownership shows there is more work to be done in terms of letting people know what support is now available.”

Buying and selling sentiment

The latest Halifax Housing Market Confidence Tracker finds a net +33 of consumers think the next 12 months will be a good time to sell, compared to +24 at end of December 2014. This is the highest score on this measure since the survey’s inception in April 2011. At the same time the proportion who believes it is now a good time to buy has slumped from +26 at end of December 2014 to +21 as at end of March 2015.

Regional differences

Regionally, house price optimism is strongest in the South East of England, where a net balance of +79 think house prices will be higher in 12 months, compared with only 40% who say this in Wales. While +69 of those living in London expect the average UK house price to be higher in a year’s time, this is lower than the same time last year (+75).

Headline House Price Outlook (HPO) Net Balance by region

Region

Q1 March 2015

Q4 December 2014

Q1 March 2014

East Midlands

+49

+71

+63

Eastern

+75

+57

+73

London

+69

+68

+75

North East

+64

+58

+65

North West

+50

+47

+54

Scotland

+51

+54

+39

South East

+79

+73

+75

South West

+63

+67

+76

Wales

+40

+62

+52

West Midlands

+57

+56

+62

Yorkshire & Humber

+66

+53

+62

GB

+64

+62

+65

Net balance (HPO) of the % of respondents that expect the average UK house price to rise over the next 12 months less those that expect house prices to fall.

 

ENDS

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