"Housing market predictions are wrong or lucky"

The number of homebuyers increased by 12% over the course of September, according to the latest data from Zoopla.

The estate agency attributes this improved consumer confidence to seasonal influence, as well as expectations of lower mortgage rates.

So, has consumer confidence returned? Brokers have offered their views on the subject.

Has confidence returned to the housing market?

Stephen Perkins (pictured left), managing director at Yellow Brick Mortgages, said anyone making confident predictions about the housing market should be ignored.

“The housing market is a mysterious beast that always makes experts look like fools, especially when predicting beyond a couple of months,” he said.

Despite the cautious view, Perkins said with mortgage rates potentially having peaked as rates come down a little, the market should see more lender and buyer appetite, and therefore confidence, moving forward.

However, Perkins expects that house prices will still be a major factor in how quickly the housing market recovers, as he said property prices still need to come down more to be affordable for most prospective buyers.

Jonathan Burridge (pictured centre), founding adviser at We Are Money, agreed with Perkins’ sentiment and added that predictions are only ever ‘wrong or lucky’.

“We have a tough few months coming up and although markets seem to have calmed down, confidence is still some way off,” he said.

Trying to guess the next 12 months in the property market, Burridge said, is like ‘threading a needle sitting on a bucking bull.’

People want to buy homes, but, he added that they also want confidence they can afford the payments.

Burridge believes that the property market is still some way off seeing the impact of rate rises filtering through to house prices.

Darryl Dhoffer (pictured right), mortgage expert at The Mortgage Expert, said on the ground for UK consumers, the story will never quite play out the same way.

“With the cost-of-living crisis still a major concern for many households, we need to see reductions in costs for consumable products and essentials, as well as further reductions in interest rates,” he said.

Dhoffer added that this in turn should release some of the pent up pressure for consumers to then look in earnest for their new homes; until then, he said the pressure cooker is still on full blast for many.

What is the main driver behind the property market?

Scott Taylor-Barr, financial adviser at Barnsdale Financial Management, said like many financial markets, the main driver behind the property market is confidence.

“With the increases in mortgage rates and reports of house price falls over the previous months, confidence had been sadly lacking, and that had therefore translated to market activity,” he said.

However, Taylor-Barr added that now with more positive economic news, mortgage rates are falling, the Bank of England has held its base rate and the predicted property crash has not occurred, so confidence is returning. People are returning to their plans to buy, move, or extend, resulting in an increase in activity in both the property and mortgage markets.

James Bull, mortgage broker at JB Mortgages, said consumer confidence is expected to return towards the end of this year and going into next year.

The dream of homeownership, he added, has not gone away and many clients have been saving towards their deposit for years.

“It is understandable that many consumers are waiting for lower interest rates before proceeding, and when these new deals start to filter through, I am confident of a busy period for the housing market,” Bull said.

Do you believe that confidence has fully returned to the housing market? Let us know in the comment section below.