We don't know what to think of housing market, say consumers

Monday 25th October 2010
Written by Rosalind Renshaw
One in three consumers believes house prices will fall over the next year – but one in four believes they will go up.

According to a consumer confidence survey released by Rightmove this morning, the highest proportion of consumers (36%) think house prices will stay the same. Only 5% said they had no idea which direction prices will go in.

But the 32% of those who believe house prices will fall is a higher percentage than this time a year ago, when only one in ten believed house prices would drop.

The huge survey of 25,584 consumers took place in the first two weeks of this month.

The main reason cited by those believing that house price falls lie ahead was lack of confidence in the economy. But the main reason given by those believing that house prices will rise is confidence in the economy. Nearly a quarter of these optimists believe that the housing market is improving.

In contrast, 20% of the price pessimists believe that the housing market will worsen. The same proportion of pessimists also see little or no improvement in the mortgage market, whereas 12.4% of the optimists see mortgages as improving in terms of both rates and availability.

Miles Shipside, director of Rightmove, said: “If you saw such an even distribution in opinion after using an Ask the Audience, you’d probably follow very quickly by using your Phone a Friend. It’s unusual to see such a split, but it shows that current economic uncertainty is forcing people to take sides in their view of the housing market.”

(10) Comments

Added by PeeBee on 2010-10-26 15:38:23

paul: "...bought recently with a 39% reduction in price i expect the market has a long long way to fall..." Oh, dear - then you made a poor purchase decision, didn't you? Should have waited until the big drop you predict. Could have saved yourself loadsamoney...
Added by Jonnie on 2010-10-26 14:13:04

Harry Monk – for god sake don’t read the news mate – it’ll kill you.

Bloomin’ economy has grown again, damn it!

Doomsday might not be as close as we hoped for……………….not what you want to hear I know, watch the blood pressure and try to smile, were all here for you if you need a rant.

Jonnie
Added by Jonnie on 2010-10-25 21:51:14

………………..i presume a man with his finger very much on the pulse like you must be laughing right now?

Ive met clever sods like you over the years – I bet you called it right at the bottom of the last trough (1996 ish ) and brought a load of cheap places with all that easy money that flooded in with New Labour then flogged the lot in the middle of 2007.

You must be loaded!! – not like these mugs that sound like they still live at home with their mum

Good on ya mate.......

Jonnie
Added by Harry Monk on 2010-10-25 20:34:52

I'm simply fascinated that anybody could think that house prices were about to go up. Don't people watch the news?
Added by paul on 2010-10-25 17:54:07

Having bought recently with a 39% reduction in price i expect the market has a long long way to fall looking at my local area.
Some houses have been on sale for four years and the ave tom is 374 days
Average wage here is 18k
average house price is 136k.....go figure...
Added by Harrison on 2010-10-25 15:28:24

It would be interesting to know the age and position of those that are confident. I would guess 50+ cash/equity rich sellers. Those that aren't confident are probably FTBs, renters and young families looking to upsize.

In my area the only houses that are shifting are the £400k-500k plus band. So I would guess a richer, older generation are selling houses to each other whilst FTBs and younger families are trapped or are renting.

Obviously this sort of stagnant market is likely to fizzle out to very little activity over the coming years, and although prices are likely to fall by a few %, it won't be enough to revitalise the market as all the FTBs will stay away - not necessarily out of choice.

With the life blood of the market drained, and the falls in prices needed to jump-start the market looking unlikely, it looks like very lean times ahead :(
Added by Voice of Sanity on 2010-10-25 11:05:03

Another sweeping generalisation for the country. The response will differ between areas of employmnet base and in some cases nil employment. People, including Governments, must realise if you earn 1000 then you can spend 1000 and thats that. We cant spend based on maximum leverage at any level. If this is realised then price inflation will be driven by proper market forces not false ones based on leverage. Economic confidence could be bolstered overnight by splitting banks into Treasury and Retail as they used to be thus keeping the publics finances away from the international risk markets. It was like this before when a more prudent view to the world was taken. Journalists reporting fact and not opinion may help people make a more informed view as well
Added by Jonnie on 2010-10-25 11:00:51

So, we’ve got a mixed bag here haven’t we?

The usual suspects – the ‘in rented prices will fall by half’ lot make up a third of people although not all of them will be as extreme as others so that should be okay.

The semi sensible ‘steady as she goes’ lot make up another third and the prices up lot make about 25% (must have all been sellers)

So, if you are an estate agent the good news is 58% percent of you audience (possibly a bit more) are a pretty decent prospect.

Of course the fact its just another bit of data to confuse the market more is beside the point , the nice thing is that we might hear from some of those angry noisy people that are still in rented and cross that they didn’t / cant buy that keep some of us amused.

…………….Happy Renter & Co – where are you?

Jonnie
Added by Richard on 2010-10-25 09:57:16

Hardly surprising that there is confusion. Who can guess the direction of the economic & social framework of this country at present? This big society experiment seems to have a few fundamental flaws such as expecting redundant public sector workers to walk into all these wonderful new positions in this wonderful new private sector growth. They'll all be in just the right place at the right time with the right skills. Some hope.
How can there be a plan for economic growth? This is a laissez-faire government, it doesn't plan public sector investment, let alone private sector investment!
Ideology rules OK?
How can a housing market that is trammelled through borrowing restrictions, regional distortions in supply & demand, price expectations & affordability, & a weariness of purpose in most of the associated sectors, possibly have any direction?
Added by F Fortescue-Smyth on 2010-10-25 09:51:27

Did the survey ask of the optimists what the basis of their optimism was? Precisely what are the factors that will drive prices up from the loose-lending driven highs of the 1997-2007 bubble? Answers on the back of a postage stamp, please.

Just goes to show how idiotic the mass of people are. All this shows is how slow some people are to get it when the economic weather changes.

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