Home movers predict rising prices

Updated: 
HousesAround two-thirds of people looking to move home have defied economic gloom by predicting that house prices will hold steady or go higher in a year's time.

Rightmove's Consumer Price Forecast found that 63% of prospective home movers felt prices would remain the same or rise, while less than a third (31%) expect prices to be lower and around 6% of people do not know what to expect.

Transactions have stuck at sluggishly low levels since the financial crisis, with mortgage lenders and potential buyers exercising caution as the eurozone crisis unfolds and the employment situation deteriorates.

Estate agents have reported that the first-time buyer market has shrunk to its lowest proportion in nearly three years, as buyers have struggled to raise large deposits or been put off by restrictive rates and fees.

Miles Shipside, director of Rightmove, said: "The public's belief in the value of bricks and mortar seems to defy the deteriorating economic situation. This is a clear message that the majority of consumers view the property asset class to be as 'safe as houses' in these times of economic uncertainty."

At a regional level, home movers in London are the most optimistic about uplifts in price, with 29% expecting prices to be higher in 12 months. Across Britain, 22% of people believe prices will go up and 41% believe they will remain the same. Wales is the most pessimistic area, with more than a third (35%) anticipating price drops in a year.

Overall, two-thirds of people expecting price falls attributed this anticipation to having little or no confidence in the economy. Of those who expected prices to be higher, 39% put this down to increased confidence in the economy, while just under a third also thought the mortgage market would improve and there would be a shortage of suitable properties to buy.

The Office for Budget Responsibility recently predicted that the housing market will have to wait until 2013 to see a big lift in activity.

Rightmove also reported "patchy" confidence in the market, with 26% of respondents in Preston, Lancashire, expecting higher prices at the end of 2012, compared with only 14% of people living just up the M6 in Lancaster.

The property analyst website, which surveyed more than 25,000 respondents, said the property market could vary considerably within a few miles, depending on factors like the mix of housing, job opportunities and local transport.

© 2011 Press Association

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