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House price growth optimism rises in the UK

The house price outlook balance, that is the difference between the proportion of people that expect house prices to rise rather than fall, stood at +33 in March, much higher than the +20 recorded in the last survey in December 2012 and is the highest since the survey began in April 2011.

Some 45% of respondents predict the average UK house price will rise over the next year and 12% forecast a decline in prices, the lowest proportion in the survey's history.

The lender said that a significantly higher proportion think that it will be a good time to buy in the next year, 55%, than believe that it will be a good time to sell, 21%. However, the proportion thinking that it will be a good time to sell has risen from 13% in the last survey in December 2012. And 16% believe that it will be a good time to both buy and sell.

Concerns about job security and the challenges in raising a deposit are highlighted as the main barriers to buying a home.
 
‘There has been much more optimism about the prospects for the housing market over the past few months, particularly as the recent UK budget announced big plans for housing, and this seems to be reflected in the attitudes of the respondents,’ said Martin Ellis, housing economist at the Halifax.

‘Sentiment regarding the outlook for house prices has improved markedly over the past quarter. This is likely to reflect the modest improvement in house prices nationally over recent months. The fact that only a small number think that it will be a good time to both buy and sell over the coming months indicates that the level of housing market activity is likely to remain subdued in 2013 despite the growing optimism regarding house price prospects,’ he explained.

The research also shows a clear north/south divide in sentiment. Although more people expect house prices to rise than fall over the next 12 months in all regions, those living in London are the most optimistic with an overall net balance of +52%, followed by the South East at +46% and the East of England at +44%. In contrast, those living in Wales and the North East are the least optimistic at +10 and +17 respectively.

Regionally, Wales and the South West have the highest proportion of people thinking that it will be a good time to buy, both at 62%, whilst Scotland has the lowest proportion with 46% of respondents feeling that it will be a good time to buy over the next 12 months.

London has the highest proportion of respondents who think that it will be a good time to sell during the coming year at 32%. In contrast, only 9% in Scotland believe that it will be a good time to sell.

Men are a little more optimistic than women about house price prospects. Some 46% of men predict that house prices nationally will increase in the next 12 months compared with 42% of women.

The majority, 67%, think that the cost of private sector renting will increase over the next year. This figure has moved steadily upward since June 2012 when it was 61%.

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