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Housing market confidence reaches three-year high

Housing market confidence reaches three-year high

Category: Mortgages

Updated: 26/02/2015
First Published: 26/02/2015

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 It is now over 6 months old so the content may be out of date.

How confident are you about the state of the housing market? Chances are, you're feeling pretty optimistic about the whole thing, with research from Clydesdale and Yorkshire Banks finding that consumer confidence is at its highest level for three years.

Changes afoot

According to the latest Annual Housebuyers Survey, 24% of those surveyed plan to change their current property either by extending or carrying out home improvements, while a further 14% said they wanted to sell their home in the coming year. Finances are a key area of focus, too, and there are signs that householders could be under less financial pressure, with 11% planning to pay off their mortgage, make overpayments or remortgage in the next 12 months.

Just 41% of those surveyed plan to simply stay in their current home, a drop of 17% from a year ago when 58% said the same, and down from 62% who had no pressing ambitions in 2013. Combined, these results show a consistently improving picture in the three years since homeowners were first asked about confidence levels, and support additional findings from the Council of Mortgage Lenders, which revealed that 2014 lending levels were the highest seen since 2007.

Steve Fletcher, head of Clydesdale and Yorkshire Banks Retail Network, said: "We have seen optimism returning to the property market over the last few years and this seems to be growing with more people planning house changes, whether it is to move, make home improvements, pay off their mortgage or even help a family member to get onto the property ladder."

House price confidence receding

However, not everyone feels quite so optimistic, particularly when it comes to house prices. Even though the majority feel confident about the market as a whole, additional research from Halifax has found that house price optimism fell to its lowest level for 18 months in January, as lending activity slowed at the beginning of the year.

Average prices may have increased 2% to reach £193,130, but only 60% of consumers surveyed expected the average property price to be higher in a year's time, the lowest optimism score seen since June 2013 when just 52% of respondents expected an increase. Craig McKinlay, of Halifax, said: "More than half of consumers still believe house prices will be higher than they are now in a year's time; however, optimism has continued to weaken. We're now seeing a return to the seasonal trend for house price activity."

Optimism may be falling, but more than half of those surveyed still believe that house prices will be higher in a year's time, and arguably, this paints a more measured picture for the housing market. Prices aren't expected to rise as rapidly as they have in recent years, with the general consensus – among homeowners and industry alike – being that growth will be at a much more moderate pace.

The jury's still out on what this all means for the year ahead, however. Some commentators are predicting that market activity will surge forwards in the spring while others suspect that it'll remain muted, but either way, it's good news for householders.

Their confidence means that many will make changes to their home and others are actively planning to move in the year ahead, which has the potential to increase the number of homes coming onto the market and ease upward price pressures in the process. So, if you're brimming with confidence and are ready to consider your options, start the process by checking out the best mortgages available so you can fund your next move.

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