The Halifax survey shows confidence in the housing market is at a five year low with one in five thinking prices will fall.
According to the Halifax their latest report shows the weakest reading for consumer confidence in UK house prices since December 2012.
The survey interviewed 1,968 British adults of which 535 are mortgage holders tracking consumer sentiment on whether house prices will be higher or lower in a year’s time.
Of those surveyed 50% now expect house prices to rise over the next year, the lowest level since April 2013 whereas 20% think house prices will fall, the highest point since October 2012.
This lack of confidence about the price of property is good news for first time buyers and should make it easier for them to purchase their first home.
Base rate rise not a major concern
There is a greater expectation of a Base Rate rise and this increase is not perceived as the main barrier for people in general to buy a house.
Russell Galley, Managing Director of Halifax Community Bank said even with a potential base rate increase on the horizon, 61% of buyers are concerned with raising a deposit and 42% concerned about job security.
We do not anticipate that an increase in Base Rate will have a significant effect on the demand for properties, says Mr Galley.
For remortgage buyers when asked about their concern in rising interest rates affecting their ability to meet their repayments, only 36% show concern and this has decreased from 42% in 2014.
Homeowners are becoming more concerned about household finances which recorded the biggest increase since the last survey.
Mr Galley said the housing market optimism has declined significantly over the past year, with almost half of people expecting a general slowdown in the market.
Londoners and the young less confident
When asked if the next twelve months would be a good time to buy, London is the only region with a negative outlook.
This could be impacting the supply of properties on the market and why home movers may choose not to buy if there are fewer quality homes available.
In contrast people from the West Midlands and Wales are the most positive.
Those aged between 16 and 24 are the only age group with a negative buying outlook, whilst those over 65 are the most positive and across the country 52% of those surveyed think that it would be a good time to buy.
There may be fewer suitable homes on the market as the equity release buyer can avoid downsizing and agree a lifetime mortgage to access cash from their home to improve their quality of life, consolidate debt or gift to a family member or friend.
Overall the South West are most positive area about selling whereas people in Wales and London the least positive with those aged 35-54 the most positive to sell.
There has been a slowdown in new purchases for buy-to-let investors as they are less optimistic after negative changes to stamp duty and taxation allowance on mortgage interest.
What are your next steps?
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