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Rightmove’s latest Consumer Confidence Survey of more than 33,000 home-movers finds that the proportion of respondents expecting average asking prices to be higher a year from now has risen to 29%, up by 7 percentage points on a year ago.
However 17% of those 2007-2012 buyers who believe their property has declined in value since purchase also state that they are currently in negative equity, believing their outstanding mortgage balance to be higher than the current value of their property.
Despite an increase in optimism on prices, overall opinion remains divided; while 26% expect average prices to be lower and 29% expect prices to be higher in a years’ time, 41% expect prices to be about the same. Many ‘price optimists’ – those anticipating higher prices – point to an improvement in the mortgage environment as grounds for their view of upwards price movement. Those anticipating an ‘improved mortgage market’ are up from 28% at the start of 2012 to 32% as we approach the end of the year.
Miles Shipside, director and housing market analyst at Rightmove, comments: “Those predicting a pick-up over the next 12 months will no doubt have hopes that the Funding for Lending Government scheme will provide the seed-corn that will encourage more lenders to scatter more mortgage products onto the volume-barren housing landscape. The mixed bag of local market conditions however, coupled with this patchy picture of sentiment, does nothing to suggest that an overall housing market recovery is looming on the horizon despite the wider economy officially emerging from the double-dip recession.”
The return of price confidence and mortgage funding are crucial ingredients for a market recovery, especially in light of Rightmove’s research into the extent of negative equity in the post-creditcrunch
housing market. More than one in five (22%) of home-owners who bought in the six years between 2007 and 2012 believes that their property is now worth less than they paid for it. However, the ‘loss’ is most acute for those who bought in 2007 when prices peaked and high loan-to-value mortgages were still commonplace. Nearly half of home-owners (49%) who bought in 2007 believe that their home has fallen in value.
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