House buyer sentiment cools off

In Yorkshire and Humberside fewer people think it is a good time to buy now than at any other time since Halifax’s survey began in 2011.

London and the South East were identified as the places where people were most likely to feel negative about buying a property in the next 12 months, while those living in Scotland and the North East were the most positive, according to Halifax’s quarterly Housing Market Confidence tracker.

In Yorkshire and Humberside 41 per cent think it is a bad time to buy, against 47 per cent who think it is a good time.

But while feelings about buying a home have become more negative, confidence that the time is ripe to sell a property is at a three-year peak, Halifax found.

In Yorkshire and Humberside 53 per cent thought it was a good time to put up a “For Sale” sign, against 37 per cent who didn’t.

The survey of nearly 2,000 people across the UK, found a “sharp rise” in the number of people who said rising prices are a barrier to buying, with 35 per cent citing it as a factor, compared with 20 per cent a year ago.

Worries about the possibility of interest rates rising are also increasing, with 18 per cent of people agreeing it is a concern.

Speculation has been mounting about exactly when the Bank of England base rate, which has been held at a historic 0.5 per cent low for more than five years, will start to rise as the economy improves.

Raising a deposit remains the biggest perceived barrier to buying a home, with this hurdle mentioned by 55 per cent of those surveyed.

The findings follow a report from property analyst Hometrack last week which found that housing market sentiment appears to be changing, with the volume of new potential buyers registering with estate agents starting to decrease and the London market in particular showing signs of a rapid cooldown.

The South East was the place where people were the most confident about selling with a net balance - the difference between the number who think it is a good time to buy over those who think it is a bad time - of 55, followed by the South West at 45 and London and the East, both with balances of 44, and Yorkshire and Humberside behind at 16.

People living in the North East were the most likely to believe it would be a bad time to sell, with an overall balance of minus 17, followed by people living in Scotland, at minus 3, and those living in the North West, which a balance of just one.

Craig McKinlay, mortgages director at Halifax, said: “Over the past two years consumer confidence has continued to grow, however it appears that we’ve reached a tipping point, with the equilibrium between buyers and sellers much more out of sync.

“The results highlight the regional variations as now people believe that it’s a good time to sell but not buy, particularly in London and the South East where house price expectations are generally higher and buyers appear to be less inclined to rush into buying a property as we have seen over the past 12 months.”

Meanwhile another report out this week warns that some homeowners could be forced to sell and rent as mortgage costs are expected to rise 34 per cent - twice as fast as household disposable income in the next five years.