Housing market confidence stabilises after post-Brexit slump

Consumer confidence in the housing market has improved over the past six months, albeit before anyone knew a snap General Election would be called.

Halifax’s latest Housing Market Confidence Tracker, which tracks house price optimism based on consumer sentiment regarding whether house prices will be higher or lower in a year’s time – showed a 2 point improvement on October 2016.

In October 2016, just after the EU referendum result, the index showed a net 42 felt house prices would rise in the next 12 months, this increased to 44 this month.

It is still below a peak of 68 recorded in May 2015.

In percentage terms this translates to 58% who expected the average property price to rise in the next 12 months, compared to just 14% who expect prices to fall.

However, this compares to a record high of 72% who were anticipating price rises in May 2015.

Among those who expect the average price to rise, there has been a shift towards expecting more modest rises.

Those expecting rises of up to 5% have increased from 26% to 30% since October, while 28% expect prices to be higher by 5% or more.

More of the public also think the next 12 months will be a good time to sell, compared with six months ago.

Now 52% of the public think the next 12 months will be a good time to sell, up by 5% from October 2016, compared with a third who expect it to be a bad time to sell.

The index was compiled based on a poll between March 23 and April 3, so the results may well be different since the election announcement.

Martin Ellis, Halifax housing economist, said: “House price optimism is little changed since the October 2016 measure, which is significant because it was the first post-Brexit survey and recorded the steepest fall since the tracker began.

“The latest results suggest that consumer confidence in the housing market is potentially settling into a new lower ‘normal’.

“This sentiment echoes the slowdown in the annual rate of house price growth, which has more than halved over the past 12 months.”

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