Confidence in housing market falls to lowest level in a year

Even though the majority (55%) of homeowners in Britain still predict an increase in property prices over the first half of 2012, the amount by which they expect them to grow has also fallen to its lowest level in a year, according to the survey by Zoopla. The average prediction is for prices to rise only 2.2% over the next six months, down from 2.7% one quarter ago.

Interestingly, homeowners surveyed continue to believe that their own properties will fare better than the average and expect the value of their own property to rise by 2.8% on average over the next six months compared to 2.2% for other homes in their local area. Similarly, only 24% of homeowners expect the value of their own property to fall over the coming six months whilst 29% expect house prices in their area to fall.

In stark contrast to the overall national picture, homeowner confidence in the London housing market continues to defy the rest of the country and the overall economic outlook. 72% of London homeowners expect average values in the capital to rise over the next six months, up from 68% last quarter. And owners in the capital now predict property prices to grow by 4.7% over the first half of 2012, up from the 3.6% expected last quarter.

Whilst half (48%) of the respondents felt the key sign that the property market is improving would be when mortgage availability improves, only 11% of the homeowners surveyed by Zoopla feel it is now easier to get a mortgage than it was three months ago.

Nicholas Leeming of Zoopla.co.uk commented: “There is a lot of general economic uncertainty at the moment which is taking its toll on homeowner confidence. Until there is some good news on the overall economy, homeowners will continue to be cautious with their optimism for the property market. Londoners, however, are living in a market detached from the rest of the UK. Many overseas buyers continue to pile into London property to take shelter from economic or political storm clouds elsewhere which is helping to boost prices and confidence in the capital.”

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