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Rightmove: house price optimism on the up

John Fitzsimons
by Lovemoney Staff John Fitzsimons on 13 May 2012  |  Comments 13 comments

A new survey by Rightmove has revealed a growing expectation that house prices will rise over the next year.

Rightmove: house price optimism on the up

The latest Consumer Confidence Survey from Rightmove has found the highest level of house price optimism in nearly two years.

More than a third of the 40,000 home movers surveyed said they expected house prices to be higher one year from now, the highest level since the third quarter of 2010. The number of respondents expecting house prices to fall over the next 12 months was also at its lowest level, at just 20%, for seven quarters.

Mortgages hold the key

For both price optimists and pessimists, the key to their level of confidence is the mortgage market.

Those predicting house price growth pointed to an improving mortgage market (35%), with continued low interest rates also a factor (14%)

Yet those who are expecting price falls pointed to little to no improvement in mortgage availability (33%), the required high deposits (16%) and the threat of rising interest rates (15%).

Fair and reasonable prices

While a significant chunk of those surveyed expect house prices to rise over the next year, almost half (46%) still believe that current house prices are above ‘fair and reasonable’ levels.

What do you think? Will house prices rise over the next 12 months? Or are they still above ‘fair and reasonable’ levels? Let us know what you think in the comment box below.

More on property:

Buy to let: confident landlords expanding portfolios

DIY spending falls to record low

How to make a rented house a home

Million borrowers face jump in mortgage repayments

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Comments (13)

  • inbetween
    Love rating 2
    inbetween said

    Sofa price optimism on the up...! Yay, we can get a bigger loan to buy one, or work more overtime to afford it!

    Nope, odd that rising house prices is good but rising sofa prices is bad....

    Report on 13 May 2012  |  Love thisLove  2 loves
  • smithdom
    Love rating 34
    smithdom said

    inbetween's comment hits the nail on the head. Those thinking that house prices will rise are characterised as optimists, and those thinking the opposite are called pessimists. This is slanted journalism and it pervades the media.

    You can report the facts without putting this kind of spin on them. It is interesting to read which organisations think that prices will go up, which think they will go down, and why. But why colour this with a totally unsubstantiated opinion as to which is good and which is bad?

    If you are going to do this then we need to see well reasoned arguments why rising house prices are good for the majority of the population. If you can't present these arguments convincingly then don't perpetuate the spin that rising prices are positive and something to be optimistic about. Those now leaving education with no prospect of owning their own home and facing crippling rent costs will not thank you.

    Report on 13 May 2012  |  Love thisLove  2 loves
  • yocoxy
    Love rating 132
    yocoxy said

    If there was a market for second hand sofas where the price always increased over the longer term, I'd invest in those too (and find the rising value of the asset a good thing).

    Given that two thirds of housholds in the uk own their home and only 16% rent from private landlords, I'd say that the tone of the article most likely does reflect the opinion of the majority.

    Good news it's going to be sunny! - whoops, you can't say that because some people like rain.

    Good news a new team will win the Premier league today! Nope that's an inappropriate tone because there are a tiny but vocal minority who are Man Utd fans..

    Report on 13 May 2012  |  Love thisLove  0 loves
  • moreteavicar
    Love rating 23
    moreteavicar said

    Ditto inbetween. Why can't our media understand that over-inflated prices of housing and utilities is devastating our economy as it removes our disposable income. You only benefit from increasing house prices if you're: 1) an estate agent, 2) a property tycoon looking to shrink your portfolio, or 3) down-sizing.

    Report on 13 May 2012  |  Love thisLove  1 love
  • moreteavicar
    Love rating 23
    moreteavicar said

    @ yocoxy "opinion of the majority" - hardly a majority think that these days, and those that do may still be blinded from the media ramming down their throats the idea that a house is an asset rather than a home. If they turn the box off and think for a moment, they might appreciate the harm being done.

    But alas, we have a growing population and dwindling property supply, so I believe prices will rise over the next couple of years, as will every other commodity, but I don't think its a good thing.

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  • smithdom
    Love rating 34
    smithdom said

    yocoxy, in your sofa market young people wouldn't be able to afford something comfortable to sit on, but this is much more serious. Yes, two thirds of us own our own home but the trend is downwards and home ownership is skewed away from the young in a way that is damaging because it is coupled with rising rents. When well educated people with reasonable jobs are unable to afford to buy or rent then something has to give.

    I'm one of the fortunate who own their home outright, but I fear for those just starting out who will find that the struggle to afford housing will define their lives. The spin that rising property prices is a good thing is an insult to the generation who will never benefit from this.

    Report on 13 May 2012  |  Love thisLove  2 loves
  • nickpike
    Love rating 270
    nickpike said

    Is this a wind-up. We're on the verge of a price correction, so average earners have a chance of buying and then we get this. This survey is probably wishful thinking of those already buying.

    With the macroeconomic situation, UK's financial problems, inflation, etc, I expect prices to fall. I'm looking at prices now just North of Birmingham and cannot believe how much they have dropped. London gets mixed-in with averages, and slews the results.

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  • hopefultom
    Love rating 43
    hopefultom said

    Nickpike

    For the last 3 years you have been forecasting a 50% drop in property prices; now you say that you" cannot believe the drop in prices just North of Birmingham "

    Are we to assume from this that prices in that area have fallen by more than 50% ?

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  • spider589
    Love rating 4
    spider589 said

    For the vast majority of us, prices can only increase in conjunction with either wage inflation, (which is not likely in the current economic climate, especially in the public sector where virtually everybody seems to be on a pay freeze), or a relaxing of lending criteria by lenders, (which is equally unlikely because they are doing very nicely having us over a barrel as they are) - unless you are Daily-Express readers you'd be pretty gullible to believe that "House prices are set to soar!" - it is not going to happen!

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  • electricblue
    Love rating 643
    electricblue said

    What does a tiny survey where only a third are optimistic indicate anyway? The headline would have doubtless been deemed as valid were the figures to have risen from 1% to 3%. I think the property boom years for most of the UK have gone for a very long time. Similar trends are obvious in the USA with some areas barely dipping over the last four years and others stuck firmly at levels 70% down from peak values. For anyone fortunate enough to be in solid employment there are great opportunities but anyone who overreached will be suffering for years yet.

    Report on 13 May 2012  |  Love thisLove  0 loves
  • moreteavicar
    Love rating 23
    moreteavicar said

    "Similar trends are obvious in the USA"

    Not a good example - USA has a large housing surplus - the politicians have been talking of schemes for pulling houses down to help balance supply-demand. Here we are on a finite Island with next to no supply, and restricted building options since our infrastructure can barely support the required additional new housing to meet the rising demand. We have the previous government to thank for their lack of a population policy and numerous landlord MPs.

    Report on 15 May 2012  |  Love thisLove  0 loves
  • MikeGG1
    Love rating 878
    MikeGG1 said

    I can't see the slant in the article. Optimism before was less than a third so it is on the up. Also there was no opinion given - just reporting of one single survey! Our Editor is sitting on the fence again and asking us. Normal journalists manage opinions on much less basis.

    So far as UK is concerned, we have a huge shortfall of housing in the South East which is helping prices to nudge up a bit.

    Elsewhere there is an over-supply so prices are falling. What we need are government policies to correct the imbalance. Directing immigration away from the South East might help. Currently most of them come to the SE.

    Expect prices to fall again when interest rates eventually rise. Mortgages are currently much more affordable due to low interest rates. However, the shortage in the SE will help to keep those prices high.

    Mike

    Report on 18 May 2012  |  Love thisLove  0 loves
  • nickpike
    Love rating 270
    nickpike said

    hopefultom said

    Nickpike

    For the last 3 years you have been forecasting a 50% drop in property prices; now you say that you" cannot believe the drop in prices just North of Birmingham "

    Are we to assume from this that prices in that area have fallen by more than 50% ?

    They have dropped significantly but not 50% as yet. The politicians have been wasting huge sums of money supporting the zombie housing market and have delayed the crash. What will bring down prices to the bottom of the curve is mortgage rates as opposed to Bank of England rates now, as they have now become detached, due to lending criteria for the banks getting tighter as the economic situation worsens. We are seeing some nice detached stuff at 130k which was considerably higher in 2007. We are seeing more and more repossessed houses.

    Prices will collapse the full 50%, and possibly more now, it is a mathematical certainty, and maybe it's now happening seeing that the politicians have only added to the damage created by previous politicians.

    The macroeconomic situation is so severe now, there is no way prices can be supported. Look at what's happening in Greece, a lot of which is not being reported. Don't think we are immune.

    Report on 18 May 2012  |  Love thisLove  0 loves

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