Confidence in UK housing market stuck at lowest level in five years

The Q1 2018 Halifax Housing Market Confidence Tracker (HMCT) shows only a small improvement on the steep decrease in the House Price Outlook (HPO) found in autumn 2017.

Confidence in UK housing market stuck at lowest level in five years

The author(s)

  • Ben Marshall Ipsos Public Affairs, UK
  • Alexandra Palmqvist Aslaksen Ipsos Public Affairs, UK
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The latest Halifax Housing Market Confidence Tracker (HMCT) shows only a small improvement on the steep decrease in the House Price Outlook (HPO) found in autumn 2017.

In October 2017 HPO - consumer sentiment on whether average house prices will be higher or lower in a year’s time - was +30, down from +44 in March 2016 and less than half its peak in May 2015.

HPO is now +33. Half expect house prices to rise over the next year, the same as autumn 2017 and remaining at the lowest level since April 2013 (45%). However, fewer people are now negative about the housing market, with 17% predicting a fall in prices over the next year, down from 20% six months ago, with 26% expecting prices to stay flat.

House Price Outlook trend

Less than a third of existing mortgage borrowers (29%) are concerned about the possibility of rising interest rates affecting their ability to meet their monthly repayments. This has fallen from 42% in 2014 and, despite the base rate increase in November 2017, compares with 36% expressing concern about affordability six months ago.1

Mortgage Rates

On being asked how much monthly mortgage payments would have to increase by before they would struggle to meet them, almost half (47%) said above £150 or that they would face no difficulties. Only 5% felt that an increase of £24 or less a month would be an issue, with a quarter point increase on the average mortgage (£156,000) equating to around a £17 rise in average monthly payment.2

Similarly, interest rates are not considered a major obstacle by those surveyed when it comes to buying a home. Instead, the ability to raise a deposit continues to be the main issue buyers face, followed by job security and rising property prices.

Technical note

Ipsos MORI interviewed 1,968 British adults, including 527 mortgage holders, aged 16+ face-to-face, between 22nd September and 1st October 2017. Data have been weighted to the known population profile.

1 Question asked in 2014 and 2018: Thinking about the next 12 months, to what extent, if at all, are you concerned about any rise in rates affecting your mortgage payments
Question asked in 2017: Thinking about the next 12 months, to what extent, if at all, are you concerned about any rise in interest rates affecting your ability to afford your mortgage payments?
2 Average advance data from UK Finance Q4 2017 (sourced by Halifax)

 

The author(s)

  • Ben Marshall Ipsos Public Affairs, UK
  • Alexandra Palmqvist Aslaksen Ipsos Public Affairs, UK

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