Consumer confidence in the housing market may have reached its peak, with the number of people expecting further price increases falling, research claimed today.
The number of people who think the value of property will go up further or remain the same during the next 12 months has fallen from 64% in May to 61% in June, according to the Woolwich.
The group said this was the first time confidence had fallen since November 2001, when it was hit by the attacks of 11 September, though the proportion of people expecting further price rises was still higher than the average of 53% during 2001.
It added that gross mortgage lending had also fallen, with a forecast £17.5bn thought to have been advanced in June, down from £19.5bn in May – though the figure was still 19% higher than it had been in June 2001.
Woolwich said the figures suggested that the property market was set to slow down naturally, as the recent double digit increases had made property unaffordable for many people.
Andy Gray, head of lending at Woolwich, said: “Our figures give an indication that confidence in the property market may have reached its peak as both average consumer confidence and UK gross mortgage lending levels have fallen slightly.
“We believe that continuously increasing house prices have started to make property unaffordable for many people which is causing the housing market to slow of its own accord.”
People living in the South continue to be most confident, with 67% expecting further price increases or values to remain the same, while those in the North and Midlands are least confident with just 59% expecting the value of their home to keep rising.
NOP Consumer Market Research questioned 1,000 people by telephone during June.
EGi News 16/07/02
