House price confidence returning

Consumer confidence in house prices is on the rise, according to new data.

12:02 02 February 2005

Consumer confidence in house prices is on the rise, according to new data.

assertahome.com and propertyfinder.com found that that 52 per cent of property hunters are expecting house prices to rise. This figure was only 30 per cent in December.

Additionally, fewer people believe house prices will fall: that figure is now 43 per cent compared with 66 per cent last month.

The survey data shows that confidence in the housing market is approaching levels not seen since last July, when 57 per cent of respondents expected prices to rise.

Another survey, by Lloyds TSB, has found that fewer people are now expecting interest rates to go up - although 51 per cent of the population still believes interest rates will climb in the next 12 months.

Lloyds TSB also found that just 18 per cent of Britons think interest rates will be the same in twelve months' time, with only 14 per cent expecting them to be lower.

The managing director of assertahome.com and propertyfinder.com, Jim Buckle, said: "Contrary to popular belief, the housing marketing is not heading for a crash.

"Last month the seeds of optimism were sown as confidence in the housing market began to increase.

"Housing market activity normally picks up at the start of the year. As the spring approaches I would expect to see a gradual improvement in house hunter confidence, provided interest rates remain steady."

Douglas Reid, head of treasury at Lloyds TSB Scotland, added: "It is crucial to appreciate that the current opinions of consumers are skewed to the higher interest rate landscape and that is still at odds with financial market expectations which expect to see rates on hold at 4.75 per cent throughout the year ahead."

The assertahome.com and propertyfinder.com survey also found that more people are prepared to take on higher mortgages, increasing from 56 per cent in December to 65 per cent this month.

However, first-time buyer figures were less encouraging. The number visiting the propertyfinder website dropped for the second month in a row.