Housing market confidence slumps

12 July 2004
Confidence in the property market seems to be in sharp decline, according to assertahome.com's June survey.

Although the majority of house hunters still expect house prices to rise over the next twelve months, 34 per cent now expect house prices to fall compared with just nine per cent in January.

East Anglia, the South East and the South West have the highest proportion of pessimists (over 40 per cent), with many now expecting house prices to fall over the next twelve months.

Northern regions remain more upbeat with Yorkshire, the North West and Scotland leading the optimists.

The managing director of assertahome.com, Jim Buckle, commented: "Even before June's interest rate increase, house hunters had begun to reduce their expectations for the housing market."

Mr Buckle added: "The Bank of England's June rate rise and Mervyn King's subsequent tough talking on house prices shocked consumers."

In total, respondents now expect national house prices to rise just one per cent over the next twelve months, down sharply from 6.6 per cent in May.

Mr Buckle concluded: "With interest rates on hold at the latest MPC meeting, we expect sentiment to steady and confidence to recover modestly from this low level. However, we strongly believe further aggressive rate rises risk destabilising the whole housing market."