Confidence in the UK housing market has fallen to its lowest level in a year but many home owners still expect property prices to increase in 2012.
Fewer British homeowners expect house prices to rise over the coming months than at any point in the last year, according to the latest Zoopla Housing Market Sentiment Survey. The proportion of home owners who now expect to see house prices climb in their local area over the next six months stands at 55%, down from 59% just three months ago.
Even though the majority of home owners 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. The average prediction is for prices to rise only 2.2% over the next six months, down from 2.7% in the previous quarter.
Home owners 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 home owners 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, home owner confidence in the London housing market continues to defy the rest of the country and the overall economic outlook. Some 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 almost half, some 48%, of the respondents felt the key sign that the property market is improving would be when mortgage availability improves, only 11% of the home owners surveyed by Zoopla feel it is now easier to get a mortgage than it was three months ago.
‘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, home owners will continue to be cautious with their optimism for the property market,’ said Nicholas Leeming of Zoopla.
‘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,’ he added.