House price growth expectations rise to pre-EU vote levels among consumers - BSA

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Consumers' expectations for house price growth have bounced back to levels seen before the vote to leave the EU, a report has found.

Nearly half (49%) of people surveyed in March believe house prices will rise in the coming 12 months, with just 10% expecting them to fall, according to the Building Societies Association (BSA).

The proportion expecting to see house prices rise is the highest the quarterly survey has seen since just before the Brexit vote in June, when 48% of people expected house prices to rise in the coming months.

When that survey was carried out, 12% expected house prices to fall.

Since that survey, the percentage expecting to see house prices rise dropped back to 42% in September and 44% in December, before rising to 49% in March.

Raising a deposit is perceived to be a bigger obstacle to buying a home than it was a few months ago, with 67% of people surveyed in March saying this is a barrier, compared with 64% in December.

Paul Broadhead, head of mortgage policy at the BSA, said: "The worst case scenarios for the economy immediately after the UK voted to leave the EU clearly didn't come to pass, and this has fed through to people's higher expectations for future house prices.

"However, we are only just starting the negotiations around the exit process.

"Consumer views on the housing market, and their prospects in it are likely to alter as the negotiation proceeds.

"Today, with actual house prices still rising above earnings in many regions, raising a deposit is an intractable issue.

"It particularly impacts first time buyers, but second steppers aren't immune.

"Higher consumer price inflation will also adversely affect people's ability to build a deposit in the year ahead."

More than 2,000 people took part in the survey in March.