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Study reveals house price gloom
People's confidence that house prices will rise in the next year has weakened in the last few months amid continued economic uncertainty, a study has found.
Just over a third of people believe that homes in the UK will increase in value over the coming 12 months, compared with almost a fifth who predict a decline, Halifax found.
But the balance between the proportion of people who expect a rise rather than a fall has dropped from 19 percentage points when a similar study was carried out in March, to 15 percentage points in June, when the latest survey was conducted. The shrinking gap suggests that confidence in a house price rise has eroded.
Official figures released earlier this week showed a North-South divide in the housing market, with prices having risen in England and Wales over the last year but falling in Scotland and Northern Ireland.
House prices increased by 2.3% in the 12 months to May, reaching £228,000 on average, the Office for National Statistics (ONS) said, but if London and the South East were stripped from the figures, the typical price would be £183,000.
Beneath the surface, much of the increase was driven by a 7.2% rise in London, which has had strong interest from overseas buyers, making it the biggest rise seen by the English capital since November 2010.
Martin Ellis, housing economist at Halifax, said that despite the signs of weakened confidence, house prices had remained broadly stable over the first half of 2012. He said: "Overall, we expect little change in prices and sales over the remainder of the year provided that the UK's economic outlook does not deteriorate significantly."
The Halifax study found that people living in London and Wales were the most likely to believe that prices would increase, while those in the East Midlands and the North East were the least likely to predict rises.
More than half of those surveyed said that challenges in raising a deposit and concerns about job security were the main barriers to buying a home.
Estate agents recently reported that the first-time buyer share of the market reached a seven-month low in May, following the ending of a stamp duty concession for this sector of the market. Lenders have also been tightening their credit criteria and borrowing is expected to become tougher in the coming months, particularly for people with low deposits.