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House Buyer Confidence Lowest in Years

House buyer confidence hit by high house prices and fears of interest rate rises

A report released by Halifax today says most house buyers believe this is the worst time to buy a house in at least 3 years. The series only began in April 2011 so, according to this particular report, this is in effect the worst time to buy a house since records began.

House buyer sentiment

Taking the UK as a whole, according to the survey conducted by mortgage lender Halifax, the net balance of people who believe now is a good time to buy a home is +5%, a figure that has dropped dramatically from +34% in the first quarter of this year. The net balance is calculated by subtracting the percentage of people who believe now is a bad time to buy from the percentage of people who believe now is a good time to buy. While the figures are still in positive territory, with more house buyers believing now is a good time to buy property than those that don’t, the surveys’ conductors insist it is the net difference that matters.

Furthermore, 35% of the two thousand people questioned believe house prices are a major barrier to buying, compared to 20% a year ago. In addition 18% of those surveyed said fears over impending interest rate rises had a negative effect on their desire to purchase property, a figure that has risen from 13% last year.

Whilst the most common barrier referred to was house buyer’s inability to raise a suitable deposit, with 55% identifying this as a barrier, the other factors mentioned seem to be indicative of a general trend in the recent statistical evidence, which points toward a cooling housing market.

Selling Property

While there has been a sharp reduction in house buyer confidence, the Halifax report has shown that the inverse is true in relation to selling property. The overall balance of people believing that the next twelve months will prove to be a good time to sell a house is currently +25%. This figure represents the highest level of discrepancy between those who are confident that now is the time to sell a house and those that believe selling property in the next year would be a bad idea.

However, while this figure represents overall confidence levels in the UK market as a whole, as is to be expected, there are several regional fluctuations in both house buyer and seller confidence.

Regional Variations

In London, the property hotbed that has seen high enough rises in house prices over the past twelve months to inspire widespread fear of a housing bubble, a net balance of -19% of people believe the next year will prove a good time to buy a house, while in the equally bubbly South East, the overall balance is -24%.

As one would expect, areas that have witnessed far more modest levels of house price appreciation over the past year tended to display higher levels of house buyer confidence, according to the report.

Halifax found that +31% of Scots believe the coming year will prove to be a good time, rather than a bad time, to buy a house. The same figure stands at +29% in the North East, +28% in the South West and +25% in Wales.

Again, perhaps as is to be expected, the exact opposite is often true in relation to confidence among those looking to sell houses.

The South East displayed the highest level of home seller confidence, with a net balance of +55%, the South West had a balance of +45%, while London and the East followed close behind, with both areas displaying an overall balance of +44%. Yorkshire and Humberside trailed by some distance with an overall balance of +16% and seller confidence in the North East is at an extremely low ebb, represented by an overall balance of -17% believing the coming year will be a good time to sell property.

Craig McKinlay, mortgages director at Halifax, said:

“The results highlight the regional variations as now people believe that it’s a good time to sell but not buy, particularly in London and the South East where house price expectations are generally higher and buyers appear to be less inclined to rush into buying a property as we have seen over the past 12 months.”


Other than the obvious regional variations, the principle conclusion that can be drawn from this report is that the market could very well be cooling as we move away from the seller’s market that has been witnessed in the past year and into a period when house buyers will look to attain more value for their money when buying property.

As such, while average national prices will likely still rise over the course of the coming year, people looking to sell their homes will have to price their property competitively and perhaps consider incentivising the sale in order to attract the right house buyer.

If you are looking to sell your home, take a look at National Homebuyers’ Top Ten Tips to Help You Sell Your Home in order to gain some inspiration and advice on achieving a quick house sale.

If you find yourself struggling to sell your house as a result of the apparently cooling housing market, or if you simply wish to achieve a quick and easy house sale that involves none of the hassle or stress which often accompanies the process of selling houses, contact National Homebuyers, we buy any house regardless of condition or location. We are the market leading direct cash house buyer, meaning we can buy your home fast; chain, stress and hassle free and in a timescale that suits you.

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