Optimism in house price prospects has increased markedly over the past three months, according to the latest quarterly Halifax Housing Market Confidence tracker.
The survey, which was conducted during the week of the Government’s budget announcement, revealed that the headline House Price Outlook balance (i.e. the difference between the proportion of people that expect house prices to rise rather than fall) stood at +33 in March. This was much higher than the +20 recorded in the last survey in December 2012 and is the highest since the survey began in April 2011.
45% of respondents predict the average UK house price will rise over the next year. Only 12% forecast a decline in prices, the lowest proportion in the survey’s history.
A significantly higher proportion think that it will be a good time to buy (55%) than believe that it will be a good time to sell (21%) in the next 12 months. The proportion thinking that it will be a good time to sell has, however, risen significantly since the last survey in December 2012 (13%).
Despite the rise in those believing that it will be a good time to sell, 16% believe that it will be a good time to both buy and sell over the coming 12 months.
Concerns about job security (58%) and the challenges in raising a deposit (57%) are highlighted by respondents as the main barriers to buying a home. There has been a slight rise in respondents identifying challenges in raising a deposit from 55% in December 2012. The proportion identifying concerns about job security is unchanged from three months’ ago.
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.”