Confidence in the housing market reaches 2-year high

Overall, those surveyed predicted average house values in their area would increase 5.4% over the next six months, but were even more optimistic about the prospects for their own homes, which they believed would rise by 5.8% – faster than their neighbours.

Housing transactions show an 80% correlation to the Zoopla.co.uk confidence index, and lag movements in confidence by around three months, indicating that rising confidence will push transaction volumes higher in the coming months.

But homeowners’ optimism for the outlook in the housing market is not shared by renters as 42% of renters surveyed by Zoopla.co.uk think house values in their area will either remain unchanged or decline in the coming six months. Renters are also least hopeful about the availability of mortgage finance with over three-quarters of renters (76%) saying it is no easier to obtain a mortgage now than three months ago. Yet, despite the difficulties in securing a mortgage, over half of renters (53%) indicated an intent to try to buy in the next six months. 

Alex Chesterman, CEO of Zoopla.co.uk, said: "Optimism in the property market is climbing back to levels not seen since before the credit crunch began in 2007 and is four times higher than it was in the depths of the decline earlier this year.

"Confidence drives transaction volumes, which in turn drives house prices. But with lending remaining constrained, transaction volume cannot recover as strongly as demand suggests it should, and the inability of first-time buyers to get a toehold on the housing ladder is the biggest single risk to the housing market recovery."

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