Why we all expect house prices to go on rising

Rebekah Downes/PA Wire
Rebekah Downes/PA Wire
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MORE than nine in 10 home owners expect property prices in their area to continue marching upwards into 2016.

Some 92% of home owners surveyed across Britain by Zoopla are confident that property values where they live will increase over the coming six months. On average, they expect prices to surge by 7.2% over the period.

The findings from the survey of nearly 5,000 home owners suggest confidence has increased compared with a year ago, when a lower figure of 88% of people were expecting house prices in their area to rise.

Around 5% of home owners surveyed believe prices in their area will fall in the next six months, while 3% think they will stay flat, with no change.

In signs that more properties may start trickling on to the market in the coming months, potentially giving buyers a wider choice, 19% of home owners surveyed said they are considering putting a property on the market, up from 15% a year ago.

Home owners’ high expectations for property prices will not bring comfort to people struggling to get on to the housing ladder.

A separate survey from Shelter among 3,800 tenants has found that nearly half of private renters in England who want to buy a home are unable to save any money towards a deposit, while a quarter are only able to save £100 or less a month.

Shelter said that further house price rises will “push the goal posts even further away for those hoping to become home owners”.

Getting a mortgage is also seen as a growing obstacle for existing home owners, as 26% of those surveyed by Zoopla think it is harder to get a home loan now than it was three months ago.

Lawrence Hall, a spokesman for Zoopla, said this perception could be due to home owners believing that ultra-cheap mortgage deals are being taken off the market by lenders in preparation for a possible future increase in the Bank of England base rate. The base rate remains at an all-time low of 0.5%.

Zoopla found that the east of England is the region of Britain where home owners are most likely to predict price increases in the coming six months, with 97% expecting values in their area to increase. Home owners in London and the South East are nearly as confident, with 96% of home owners there expecting prices to edge upwards.

Home owners in Scotland were found to be the least confident about property prices rising, although the vast majority (82%) still expect to see prices increase.

Those living in Wales and the north east of England were also among the least confident, with 86% of home owners there expecting prices to move upwards.

Mr Hall said: “While traditionally the estate agency market tends to take a break over Christmas in terms of completions and viewings, home owner confidence shows no sign of slowing down and many individuals use the end of the year as a landmark to evaluate how much their property has appreciated over the calendar year.

“The only slight chink in the armour is the fact that a sizeable number of people still feel securing a mortgage is becoming more difficult.”