Housing market optimism on the rise

Published : 26th March 2015

Two new reports give a generally optimistic view of the housing market, despite what some observers say is a pre-election lull beginning to appear.

Firstly the Halifax Housing Market Confidence Tracker, which surveys how people feel about the housing market, says optimism has rebounded amongst the public.

February saw a rallying of house price optimism among consumers, from an 18-month low of +52 at the start of the year to +60 - even though the figure is down from the levels reached late last year. 

Halifax measures its house price optimism as the net balance of the percentage of respondents that expect the average UK house price to rise over the next 12 months less those that expect house prices to fall.

Low or no inflation, continued record low interest rates and the early signs of higher take-home earnings have contributed to the feel-good factor about house prices, the Halifax says. 

Secondly the British Bankers’ Association says borrowers are becoming more confident.

Gross mortgage borrowing in February was £9.6 billion - that’s actually 17 per cent lower than a year earlier but the association says house purchase approvals are again “starting to trend upwards” because approvals generally were higher than in January.

Mark Harris, chief executive of mortgage broker SPF Private Clients, says some of the increase is down to government schemes aimed at helping first-time buyers.

“While we don’t believe that the lack of inflation will result in a cut in base rate, what it does mean is that a rate rise this year is highly unlikely and could even have been pushed back for 18 months to two years. Crucially, when rates do edge up, the Bank of England has hinted that they will do so very slowly, eventually stabilising at around 1.5 to 2.0 per cent - much lower than we have been used to” he says.

From: http://www.estateagenttoday.co.uk/2173-housing-market-optimism-on-the-rise