Interest rate freeze relieves consumers

There has been a recovery in the confidence of househunters for the first time since interest rates began to rise in November.

09:36 07 September 2004

There has been a recovery in the confidence of househunters for the first time since interest rates began to rise in November.

In August 30.3 per cent of those looking for houses thought prices would fall over the next year, compared with 35 per cent in July, according to a survey by assertahome.com.

But this is still a large increase from the nine per cent who felt prices would fall in January.

Almost two out of every three people surveyed (65.7 per cent) believe the housing market will rise over the next twelve months, an increase of almost nine per cent from the preceding month.

Regionally, the south of England is more pessimistic than other regions and those in Scotland are the most confident in the property market.

People who expect prices to fall tend to see rising interest rates as the main reason for this, with three out of four citing this as one reason for their pessimism.

Jim Buckle, managing director of assertahome.com commented: "Even the laggard house price indices have finally registered the end of the boom."

"Confidence in the future of the market rose slightly . . . we believe, however, that this is a temporary fillip and that confidence will subside again over the coming months as consumers' pockets increasingly feel the pinch of higher rates."