Date Published 24 July 2013
`This increase in optimism is partly due to house prices being stronger than expected in the first half of the year. We continue to see a clear north / south divide with significantly higher proportions of people expecting prices to rise in the south than elsewhere in the UK.
`Nonetheless, the market still faces substantial headwinds with, for example, house prices remaining above the historical average in relation to earnings. Such factors are likely to prevent a sharp acceleration in house prices.`
More than half (52%) of British adults predict the average UK house price will rise over the next year – an increase of 7 percentage points since March and 25 points since June 2012. Londoners are the most optimistic with nearly three-quarters (73%) expecting a rise.
Those living in the North West are the least optimistic with just over a third (35%) of respondents predicting that the average price will rise. Half (50%) of Londoners expect house prices to rise by 5% or more over the next 12 months – double the UK average (24%). This is a substantial increase from 20% in 2013 quarter 1 and 18% a year ago.
The various initiatives designed to stimulate the market such as the funding for lending scheme, New Buy and Help to Buy equity share schemes appear to be working which is encouraging.
Despite this, there has been little change in buying sentiment. There has, however been a marked improvement in sentiment towards selling although the net balance remains against selling. A significantly higher proportion think that it will be a good time for people to buy (57%) than believe that it will be a good time to sell (30%) in the next 12 months.
Now, with the rise in those believing that it will be a good time to sell, just under a quarter (23%) believe that it will be a good time to both buy and sell over the coming 12 months. This compares with 16% three months’ ago.
Mentions about being able to afford a deposit increased significantly over the past quarter with 64% of respondents highlighting this as one of the main barriers to buying a home compared with 67% in Q1 2013 The proportion identifying concerns about job security has stayed unchanged at 58%.
More people expect the average house price to rise than fall over the next 12 months in all regions. While all regions have become more optimistic since the last survey, those living in London are the most optimistic with an overall net balance of +69, followed by the South East (+52) and the East of England (+49). In contrast, those living in the North West (+23), East Midlands (+25) Wales (+25) and Yorkshire and Humberside (+26) are the least optimistic.
Regionally, Wales has the highest proportion of people thinking that it will be a good time for people to buy (66%), closely followed by the South East and East of England regions (both 63%). Whilst London has the lowest proportion with 47% of respondents feeling that it will be a good time to buy over the next 12 months, just below the West Midlands (49%).
London (41%) has the highest proportion of respondents who think that it will be a good time to sell during the coming year. In contrast, only 9% in Scotland believe that it will be a good time to sell.
54% of men predict that house prices nationally will increase in the next 12 months compared with 49% of women. The House Price Outlook balance for men stands at +43 percentage points compared with +38 percentage points for women.