Jobs fears dampen growing confidence in house price rise

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Consumer optimism in the housing market is growing, but so are fears over job security, the Building Societies Association (BSA) has said.

Four out of 10 people expect house prices to rise this year, up from a third when the survey was last carried out in December 2011, the BSA’s Property Tracker study found.

Consumers in the South East are the most “bullish” in the UK, with 53 per cent forecasting price rises, compared with 30 per cent of people in Wales, who are the least optimistic according to the survey.

Despite the overall improvement, 56 per cent of people cited job fears as a barrier to the market recovering, up from 54 per cent in December.

Women and people aged between 45 and 54 are particularly concerned about deteriorating employment conditions, the BSA said.

The proportion of people who see stamp duty as a barrier has also risen, from 10 per cent three months ago to 12 per cent, which may reflect the impact of the ending of a two-year stamp duty concession for first-time buyers next week, the study suggested.

Paul Broadhead, head of mortgage policy at the BSA, said: “The majority of home purchases are made because a consumer wants, rather than needs, to move house. This means that consumer sentiment is a useful leading indicator of future sales activity in the housing market.

“It is good to see some positive indicators, price change or an expectation of price change can stimulate activity although inevitably it isn’t good news for all.”

He continued: “A market that will be characterised by broadly flat or slow price increases; one where transaction volumes are lower than over the past 10 years; where saving to buy becomes commonplace and a proportion of the population prefers to rent.

“It’s wrong to assume that everyone who is renting is doing it because they have to.”