The general public in the UK are split regarding the direction of property prices over the coming 12 months, according to new research from the Worldwide Property Group.
The results of the company's monthly confidence tracker survey reveals that 37% of respondents believe that house prices will rise over the course of the year whilst 35% are of the opinion that prices will remain static. Some 28% indicated that they are expecting prices to fall during this time.
The survey, which was conducted throughout February, also revealed some interesting figures on the subject of interest rates, a subject which has begun to receive a great deal of media attention in recent months.
A huge 77% of those who took the survey believe that rates will increase during the next 12 months, although two thirds of these are not expecting any more than a half percent increase in total. This lends weight to the market expectation that rates are set to rise relatively soon. Interestingly, 5% indicated that they anticipate a further reduction in interest rates during this time.
Overall, confidence in both domestic and overseas property continues to ride high with 72% of the opinion that right now is a great time to buy a property in the UK. 77% feel that this is also a good time to make a foreign property acquisition and this represents the first time since the survey began in August 2009 that overseas property has received a higher confidence rating that the UK. 69% indicated that they are currently considering an overseas purchase with the United States still firmly in the number one spot.
Some 69% of those who responded to the survey placed property as their first investment choice, some way ahead of gold in second place with 22% of the vote.
‘The results of this survey show that, in general, people are expecting house prices in the UK to further consolidate during the course of the year,’ said Kevin Wilkes, managing director of the Worldwide Property Group.
‘The UK market has fared pretty well during the recent economic storm with minor declines compared to the likes of some other countries, the USA and Spain being obvious examples. The continuing stability of UK house prices is good news and I don't foresee this being impacted in anyway by minor rises in interest rates,’ he explained.
‘Affordability for first time buyers has improved substantially in the last few years, whilst for second home buyers there has not been a better time for many years to make that purchase. For property investors there is currently a whole world of unbelievable opportunity,’ he added.
Meanwhile, the decision by the Bank of England's Monetary Policy Committee (MPC) to keep the base rate on hold at 0.5% for a full two years should not lull borrowers into a false sense of security as rates will rise soon, according to Simon Gammon, head of Knight Frank Finance.
‘In February three members of the committee voted to raise rates, and I would not be surprised if that number had increased further when we get the minutes of this month's meeting. The MPC has nine members so it would only take a small swing in sentiment for those voting for a rise to be in the majority,’ he said.
‘Although there is a feeling that lenders have already factored an increase in the base rate into their own rates, I would not take that for granted. As soon as rates do rise there will be a rush to lock into longer-term fixed rates before any further increases. This will inevitably lead to the best deals disappearing quickly and, from a purely commercial view, will allow lenders to increase their margins,’ he explained.
'The average five year fix has already edged up to about 5.5%, almost 200 basis points higher than the markets low point of around 3.7%. Now is absolutely the time to take expert advice and review your borrowing arrangements, I think this is just the start. There is likely to be a rush for longer term, fixed products and the best deals will not be around for long. The lenders offering the most favourable rates will be deluged with applications meaning service levels could also slip and customers may not get the rate they were hoping for,’ he added.
0 comments:
Post a Comment