Homeowners expect house prices to rise further - Mortgages - News - Moneyfacts


Homeowners expect house prices to rise further

Homeowners expect house prices to rise further

Category: Mortgages

Updated: 21/04/2016
First Published: 21/04/2016

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Homeowners have been enjoying a surge of house price rises in recent years, with national records being broken on a seemingly monthly basis. There's no sign of things slowing down any time soon, either, and as a result, the vast majority of homeowners expect the value of their property to rise further in the months ahead.

Great expectations

The figures, from the latest Zoopla Housing Market Sentiment Survey, show that 92% of respondents believe that property in their area will continue to rise in value over the next six months, with an average expected increase of 9.5%.

This is despite industry speculation that the market will cool down, not to mention uncertainty surrounding the upcoming EU referendum, which just shows the strength of homeowners' confidence in the market at large. Indeed, homeowners believe that their own property will increase by an average of 8.8% in the next six months, which despite being slightly down from the expected increase in their area, is still 2% more than the rise they predicted in October last year.

Perhaps unsurprisingly, homeowners in the East and South East are most confident about rising property values, with 96% of respondents in both regions expecting the value of homes in their area to continue rising. This is closely followed by homeowners in London, where 94% predict property growth – and here, they expect to see values rise by 12.5% over the next six months, considerably higher than the national average.

Making improvements

The research also found that many homeowners – 44%, in fact – are planning to make improvements to their properties in the next six months, a 3% increase from October, with 41% of those planning to spend more on home improvements this year than in the last 12 months.

A further 8% are planning to refinance, but unfortunately, some may find it more difficult, with the figures revealing that 32% of homeowners feel that mortgages are harder to obtain than six months ago – up from 26% who said the same in October last year.

This shows that, even though confidence levels overall are high, being able to get a mortgage approved is a growing concern, which could potentially impact market confidence – and even finances – going forward.

Lawrence Hall, spokesperson for Zoopla, commented on the findings: "Despite uncertainty around the upcoming EU referendum, this does not appear to have knocked consumer confidence levels. As you'd imagine, those who live in areas that have seen the most marked property value increases over the past few years, such as London, the East of England, and the South East, have the most confidence in further value rises over the coming months.

"What is slightly surprising is the number of homeowners who believe it is now more difficult to secure a mortgage rising to a third (from a quarter last year), despite historically low mortgage rates. This could indicate that the supply of low mortgage rates could be about to reduce as lenders try to pre-empt the Bank of England's movements regarding the Base Rate."

What can you do?

You may think that it'll be harder to secure a mortgage in the current climate, but there are still some truly fantastic deals to be found, and as long as you build up a suitable deposit (or have sufficient equity from your current home) and have the right credit rating, there'll be no stopping you!

Make sure your credit rating is up to scratch by heading to a credit check provider (such as Experian Credit Expert), and double-check that your savings account is offering the kind of rate that can boost your deposit fund. Once that's all sorted it's time to find your ideal home together with the right mortgage, and then you, too, could benefit from rising property prices in the months ahead.

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

Related Articles

Does your mortgage lender owe you money?

Earlier this week, the financial watchdog revealed that hundreds of thousands of mortgage holders could have been overcharged by their lender. Are you one of the many who could be in line for a windfall?

Do you think your home will rise in value?

There’s been a lot of talk recently about the rate of house price growth slowing, but is it affecting your personal expectations? According to research, it could be, with fewer people now expecting the value of their property to increase.

Confidence among “second steppers” is on the rise

We all know how difficult it can be taking that first step on the ladder, but what about the second step? In many cases, getting onto the next rung can be just as challenging, but happily, confidence among this cohort appears to be on the rise.