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Housing market confidence flatlines

15th August 2005 | back to article listings BACK    print this article PRINT

Confidence in the British housing market has continued to flat line for the fourth consecutive month, remaining static through July, says a Woolwich survey. Fewer than 50 per cent of respondents told researchers that they expected to see the value of their property increase in the next six months, a figure that has remained the same since April.

The figure is a marked decrease in the 62 per cent who were confident that the value of their property would continue to gain in July 2004. The figures show a wide disparity of views however, with home owners who have remained behind the general price curve generally confident that they would catch up.

Conversely, those that have seen the highest gains in recent years remained the least downbeat, with nine per cent of home owners in the south east predicting a fall in property prices, and only 43 per cent expecting gains.

Homeowners in Scotland and the north east, still lagging slightly behind prices in other regions where most confident that their property would increase, at 61 per cent and 52 per cent respectively reporting they expected price increases.

The Woolwich has emphasised that it gathered its information before the Bank of England's 0.25 per cent rate cut earlier this month, and said that it is not yet clear what effect this may have on homeowners outlook.

"It's the first cut in the base rate for two years so this is our best chance to shake the housing market from its lethargy," said Andy Gray, head of mortgages at the Woolwich.

"Those with existing mortgages will be able to loosen their belts a little, but whether it is enough to entice more buyers to the market is open to question. We will look with interest to see how buyers respond."

The downbeat public mood seems to be borne out by figures, as a separate survey showed that house prices fell 0.2 per cent through July and early August, with the average asking price for a property now £196,282. The rate of house price inflation was the lowest for ten years.

The average number of properties on estate agents books increased from 71 to 72 through July and early August as sales slowed, and the length of time the average property stayed on the market increased from 75 to 78 days.

"Numbers of sales are slowly starting to recover, but we still face the prospect that 2005 will be the toughest housing market since we came out of the mid-1990s doldrums," Miles Shipside of Rightmove told Sky News.

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