Some 29% of 33,000 respondents think prices are on the rise, up 7% on the figure from a year ago, the survey shows.
However, despite an increase in optimism on prices, overall opinion remains divided. Some 26% expect average prices to be lower and 41% expect prices to be about the same.
Those anticipating higher prices point to an improvement in the mortgage environment as grounds for their views. The number anticipating an improved mortgage market is up from 28% at the start of 2012 to 32% now.
‘Those predicting a pick up over the next 12 months will no doubt have hopes that the Funding for Lending Government scheme will provide the seed corn that will encourage more lenders to scatter more mortgage products onto the volume barren housing landscape,’ said Miles Shipside, director and housing market analyst at Rightmove.
‘The mixed bag of local market conditions however, coupled with this patchy picture of sentiment, does nothing to suggest that an overall housing market recovery is looming on the horizon despite the wider economy officially emerging from the double dip recession,’ he added.
He also pointed out that less equity enable home owners to trade up remains a drag on market activity so the return of price confidence and mortgage funding are crucial ingredients for a market recovery.
Rightmove research also shows that 22% of home owners who bought in the six years between 2007 and 2012 believe that their property is now worth less than they paid for it.
However, the ‘loss’ is most acute for those who bought in 2007 when prices peaked and high loan to value mortgages were still commonplace. Nearly half of home owners, 49%, who bought in 2007 believe that their home has fallen in value, limiting their capacity to trade up in a market driven by equity.
‘While a fall in equity is not necessarily a blocker to a move, with lenders demanding a substantial deposit to unlock their best rates it will deter many from trying to sell and buy again. As long as the sums do not add up to make a move up the market worthwhile we are unlikely to see a substantial recovery in the volume of sales, said Shipside.
‘Many home owners who are trapped by the falling value of their bricks and mortar will now feel as though they are prisoners of their own mortgage. Five or six years on, many of the first time buyers of 2007 will be struggling to progress from starter pad to family home,’ he explained.
Some 17% of those who bought in 2007 to 2012 who believe their property has declined in value since purchase also state that they are currently in negative equity, believing their outstanding mortgage balance to be higher than the current value of their property. This rises to 21% amongst those who bought in the peak year of 2007.
However Shipside believes that the fact that there are more price optimists than this time last year is encouraging news for both those in negative equity and those whose equity pot has shrunk. ‘In the post 2000 free for all, many lenders adopted a policy that assumed negative equity was a phenomenon from a previous age. Many built strategies on the cornerstones of increasing property prices and low or no deposit lending. The result of this approach is a negative equity millstone around the necks of many buyers from that era which will take years to lift,’ he said.
‘In the current economic climate it will take more than a modest recovery in property prices to help its victims to consider moving home again. Ironically, the market would now benefit from a return to some of the characteristics reminiscent of those lax years that helped cause the problem of falling equity, with a return to increasing property prices on the increase and lower deposit lending. However, the new FSA rules on lending, set for 2014, should ensure that lenders cannot repeat the mistakes of the recent past,’ he added.
