Confidence is low but price rises expected

0
Have your say

MOST homeowners expect property prices to rise in 2012, according to a new survey.

But despite the findings, confidence in the market has hit its lowest level in 12 months according to the same research.

Property website Zoopla invited users to give their predictions for the coming year.

More than 5,000 people, some of them property professionals, responded.

From them, Zoopla was able to determine the level of confidence in the market.

The results showed that 55 per cent of respondents expected property prices to rise in 2012, but the figure was four percentage points lower than in January last year.

The expectations for average property price increases was also lower than in January last year, reduced from 2.7 per cent to 2.2 per cent.

Interestingly, homeowners 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 per cent on average over the next six months compared to 2.2 per cent for other homes in their local area.

Similarly, only 24 per cent of homeowners expect the value of their own property to fall over the coming six months whilst 29 per cent expect house prices in their area to fall.

In stark contrast to the overall national picture, homeowner confidence in the London housing market continues to defy the rest of the country and the overall economic outlook.

Seventy-two per cent of London homeowners expect average values in the capital to rise over the next six months, up from 68 per cent last quarter.

And owners in the capital now predict property prices will grow by 4.7 per cent over the first half of 2012, up from the 3.6 per cent expected last quarter.

Whilst half (48 per cent) of the respondents felt that the key sign that the property market is improving would be when mortgage availability improves, only 11 per cent of the homeowners surveyed by Zoopla feel it is now easier to get a mortgage than it was three months ago.

Nicholas Leeming, of Zoopla.co.uk, said: “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, homeowners will continue to be cautious with their optimism for the property market.

“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.”

According to a further survey by Zoopla, average house prices in Britain finished 2011 at £221,331, down a modest £854 (0.38 per cent) from the same time one year ago, according to property valuation website Zoopla.co.uk.

Scotland, where average property values now stand at £164,844, outperformed the rest of Britain in 2011, recording an average increase of 6.73 per cent.

Average home values fell across England by 0.75 per cent (£1,719) and finished the year at £228,926, whilst the average property in Wales is now worth £153,826, down £172 (0.11 per cent) compared with one year ago.

In England, property values have risen over the past 12 months in London the South East whilst falling substantially in the North.

The average home in London is now worth £416,890 up £9,283 (2.28 per cent) on one year ago. The North East was the worst performing region over the past year with average house prices falling £9,596 (5.77 per cent) to £156,659.

Wigan topped the list of best performing cities over the past year, with property values having climbed 5.62 percent (£7,057).

In contrast, homeowners in Newcastle saw an average decline in property prices of 5.5 per cent (£9,650) over 2011.

Mr Leeming said: “National statistics on the housing market can mask differing fortunes in different parts of the country.

“Londoners continue to see the market go from strength to strength with high demand for a limited number of properties boosting house prices.

“However, for areas such as the North East where the local economy has suffered more than most, it’s a different story.”