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Consumers predict house price increases Confidence amongst home


Two independent consumer research reports show that the public expect house prices to increase over the next year. The latest Housing Market


Sentiment Survey from Zoopla shows that 67 per cent of British home owners expect house prices to rise over the next six months. Average property prices in the UK are predicted to increase 3.9 per cent by October as confidence in property improves. The figure represents the highest proportion of home owners predicting property price growth since the first half of 2010; at the end of 2011, 55 per cent of owners predicted rise rises. Home owners are also more


bullish about how much they expect average house prices to rise over the next six months. At the end of 2011, owners expected prices in their local area to increase 2.2 per cent on average. Over the last quarter this has risen to 3.9 per cent, again, the highest growth expectation in almost two years.


LETTING MARKET Tenants struggle to meet payments


Four in ten (41 per cent) members of the Association of Letting Agents (ARLA) reported an increase in the number of tenants’ struggling to meet their rental payments to landlords in the six months to March 2012. As a result, an increasing


number of tenants are attempting to ‘knock down’ the price of their rent when negotiating with landlords. Asking for reduced rents is most prevalent in the North East of England and the South West, and it is least prevalent in London. Ian Potter, operations manager


at ARLA., said: “As unemployment rises and average rents also increasing in some regions, more and more tenants are finding it impossible to make ends meet. It is likely that the same is


Ian Potter


happening for landlords, who may find their mortgage rate is rising. At worst, this double whammy may result in landlords


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defaulting on mortgages and tenants being forced to move out of a property.”


ARLA explains that it highlights


just how important it is for both landlords and tenants to carry out thorough research and, where possible, checks before signing a tenancy agreement. “Our research shows that just 10


per cent of tenants are asking for references on a potential landlord,” explains Tim Hyatt, ARLA president. ARLA points


Tim Hyatt


out there are national


discrepancies: In Hertfordshire for instance there has been a steady rise in rental amounts being asked and achieved over the last six to eight months. This has had a knock on effect on rental arrears with more tenants struggling to keep up with the higher rents. ARLA members are also seeing the gradual return of the investor landlord to the market.


owners in London is at a near all-time high with 82 per cent of property owners in the Capital confident of price rises over the next six months: London home owners predict house price rises in the Capital of 5.5 per cent by October. Nicholas Leeming, director at


Nicholas Leeming


Zoopla, said,“These results show that home owners now feel a lot more positive than at the end of last year and this confidence could bolster transaction and activity levels as we progress in 2012.” There has also been an improvement in sentiment towards mortgage financing with an increase in the number of property owners reporting that it is now easier to get a mortgage than it was at the end of 2011. Some 17 per cent of


respondents believe mortgage availability has improved, up from 11 per cent last quarter.


GLASS HALF FULL The Zoopla research was backed up Halifax research which found that 39 per cent of those questioned believed prices will generally increase over the next year, almost double the 20 per cent of people who predict they will fall. This is the most positive view since the quarterly series began 12 months ago. Londoners are the most confident about rises and those in the North East the least positive. In the latest survey, all 11 regions


saw a greater number of respondents with a belief that house prices will rise rather than fall over the next year. This compares with eight regions in January and three in October 2011’s survey. A distinct north- south divide has appeared, with the average House Price Outlook balance in the south, at +26, more than double that in the north (+12). The north-south divide has


HOUSE BUYERS First time buyers remain optimistic


One in eight people (12 per cent) hope to buy their first home in the next five years and nearly a quarter of first time buyers plan to buy in 2013 according research from the Post Office. Of those who plan to buy their first home within the next five years, 22 per cent hope to do so in 2013 and 14 per cent expect to buy in 2012. The research also reveals the


prospective first time buyers expect to save an average deposit of 16 per cent. Post Office’s customer data confirms that first time buyers in 2011 put down just over 15 per cent on average Mike Cook, head of


mortgages at Post Office, explains: “First time buyers are the life blood of the property market and our research shows that challenging stories about first time buyers and wider economic issues have not dampened aspirations to get on the housing ladder. Despite the resurgence of 10 per cent


deposit mortgages recently, the average first time buyer is aiming for the cheaper rates available at 15 or 20 per cent deposit – even if it takes that bit longer to save.” Almost half of first time


Mike Cook


buyers (45 per cent) say they are confident they can fund the deposit by themselves. Another 10 per cent plan to use money from an inheritance.


“With the end of stamp duty


exemption for homes which cost less than the threshold £250,000, first time buyers will now have to find the money for stamp duty as well as their deposit,” adds Cook. “It does appear that for the majority of would-be buyers the good old savings account comes to the rescue with the rest receiving a helping hand from family and the Government.”


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widened significantly since January’s survey when sentiment in the south (+8) was only slightly more positive than the north (+6). Londoners


Martin Ellis remain the


most confident about the prospects for the housing market with an overall net balance of +29, followed by the East (+26), the South West (+24) and the South East (+23). At the other end of the spectrum, those in the North East have the least positive outlook for house prices (+6). Martin Ellis, housing economist at Halifax, says, “Consumer confidence in the housing market continues to improve, albeit from a very low base. This is consistent with the broad stability that we have been seeing in house prices nationally in recent months.”


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