House price optimism rises

The survey which was conducted during the week of the Government’s budget announcement revealed that the headline House Price Outlook balance stood at +33 in March. This represented a significant increase on the +20 recorded in the last survey in December 2012 and is the highest since the survey began in April 2011. But although prices are expected to rise in all regions a clear north / south divide remains.

Martin Ellis, housing economist at Halifax, said: "There has been much more optimism about the prospects for the housing market over the past few months, particularly as the recent UK budget announced big plans for housing, and this seems to be reflected in the attitudes of the respondents.

“Sentiment regarding the outlook for house prices has improved markedly over the past quarter. This is likely to reflect the modest improvement in house prices nationally over recent months. A clear north / south divide exists with significantly higher proportions of people expecting prices to rise in the south than elsewhere in the UK.

"Only a small number think that it will be a good time to both buy and sell over the coming months. This finding indicates that the level of housing market activity is likely to remain subdued in 2013 despite the growing optimism regarding house price prospects."

Halifax found that more than four in ten (45%) respondents predict the average UK house price will rise over the next year.

Only one in eight respondents (12%) forecast a decline in prices – the lowest proportion in the survey's history.

Over half (55%) of those surveyed said believe that it will be a good time to buy and 21% believe it will be a it will be a good time to sell in the next 12 months.

Despite the rise in those believing that it will be a good time to sell fewer than one in six (16%) believe that it will be a good time to both buy and sell over the coming 12 months.

The survey also found that concerns over job security (58%) and the challenges in raising a deposit (57%) were highlighted by respondents as the main barriers to buying a home.

Those living in London are the most optimistic with an overall net balance of +52%, followed by the South East (+46%) and the East of England (+44%). In contrast, those living in Wales (+10%) and the North East (+17%) are the least optimistic.

Regionally, Wales and the South West have the highest proportion of people thinking that it will be a good time to buy (both 62%) whilst Scotland has the lowest proportion with 46% of respondents feeling that it will be a good time to buy over the next 12 months.

Ben Thompson, managing director of Legal & General Mortgage Club, said: “The rise in house price optimism recorded by Halifax is a positive sign for the market as a whole. These results support the findings of our latest Mortgage Mood Survey which reveals that 70% of UK homeowners believe the current price of their property reflects its actual value.

“Value is all down to demand so this belief that house prices are fair highlights a shift to a more realistic attitude. Hopefully a combination of buyer and seller optimism, alongside a more diverse range of mortgage products, will help to drive a much needed boost in the market.

“These findings also indicate that price concerns are not the primary stimulus for the recent market stagnation. Issues surrounding the availability of suitable housing stock and the accessibility of appropriate mortgage finance need to be addressed if a true recovery is to take place.”