Miles Shipside, director of Rightmove comments: “The public’s belief in the value of bricks and mortar seems to defy the deteriorating economic situation. This is a clear message that the majority of consumers view the property asset class to be as ‘safe as houses’ in these times of economic uncertainty”.
41% of respondents predicted that prices in their area would be more or less the same in 12 months, the single largest group. This ‘price stability’ group has increased by five percentage points from the same quarter a year ago. Around one in five (22%) expect prices to be higher, down from 27% a year ago, indicating a slight weakening of price confidence in some parts of the country.
The proportion that may be defined as ‘price pessimists’ – those expecting prices to be lower in 12 months’ time – remains broadly the same as a year ago at 31% compared to 32% in Q4 2010. When asked to give the main reason for expecting price falls, 66% cited an increased concern about the UK economy – a jump of 13% on the start of 2011.
Shipside adds: “While the ‘price pessimist’ camp remains broadly unchanged on a year ago, the reasoning for price falls has swung firmly towards concerns for the UK economy. It should be remembered that in spite of the overall confidence expressed in this survey for property prices, transactions volumes are still well down on historic norms. Economic stability in the UK and Eurozone will be needed before many are willing or able to re-engage with the property market”.
At a regional level, home-movers in London were the most optimistic about prices in their area increasing with 29% expecting prices to be higher in 12 months’ time. Wales was the most pessimistic region, with 35% predicting lower prices one year out.
Rightmove’s survey also reveals the current market to be extremely patchy and localised within the regions themselves. For example, in the North West 26% of respondents in Preston expect prices to be higher in 12 months’ time, compared with just 14% in Lancaster, only 20 miles away. The property market outlook can vary considerably within just a few miles, depending on factors like the mix of housing, employment opportunities and transport.
Shipside comments: “Although the majority view at a national level is that the UK housing market will avoid price falls in 2012, local variations highlight how patchy confidence can be depending on an area’s housing mix and wealth demographics. The wealthier middle-to-upper price brackets may be feeling fairly blast-proof from any further economic eruptions, and see a less turbulent outlook. Meanwhile some of the more cash-strapped terrace and semi dwellers may feel far more exposed to the negative pressures of reduced mortgage availability and job uncertainty”.
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