'House prices will rise': are we turning the corner?
Filed under: House Prices
So is that it, are we finally out of the woods, or is there something more subtle going on?
RisesThe survey, from Zoopla.co.uk, found that 63% of us think that prices are set to rise. That figure is up from 59% this time last year. Meanwhile, only 21% think prices will fall – down from 26% last year. The average rise expected is 3.4%, and 4.7% in London.
In a housing market where we've heard so much negative news, this comes as a welcome change. So does this mean we are past the worst for the housing market?
Pinch of saltSadly, this news needs to be taken with a few pinches of salt. First of all, confidence is still low compared to historical figures. Back in 2009 and 2010, by far the majority expected increases, and the average predicted was up around 6%. So the bigger picture is one of mild optimism.
The second issue is that this confidence is partly seasonal. Lawrence Hall of Zoopla.co.uk commented: "Late summer and early autumn are busy periods for the property market which can lead to a boost in homeowner confidence."
And finally, some of it is a triumph of hope over experience. The fact that it is sentimental can be seen from the fact that the same survey showed that homeowners are more confident about the performance of their own homes than those of their neighbours. In many cases people are predicting house prices to rise, because that is what they desperately hope - despite the fact that their hopes may be entirely illogical.
What next?So what is really going to happen? No-one really knows, but the experts have made their predictions. Most, it would seem, are forecasting a slight decline during 2012. RICS and Hometrack both forecast a 3% fall, while Nationwide predicts they will be flat, and Halifax says that at worst they will fall 2%.
However, Halifax says that at best they may rise 2% - matching Rightmove, which expects a rise of 2% in the year. The most positive is CEBR, which says that in the five years from 2011 to 2016 house prices will rise 15%.
It would seem, therefore, that homeowners are more optimistic than any of the experts. The question is whether their optimism will translate into more buyers, more sales, and a healthier housing market.
What do you think? Let us know in the comments.
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