The latest Rightmove Consumer Confidence Survey finds that the proportion of people in Greater London expecting prices to be higher one year from now has dropped from 53% to 43% since last quarter. This view, taken from 2,591 prospective home-movers in the region, comes despite a combination of factors exerting downward pressure on prices during the second half of 2010. The majority remain bullish with 72% reporting that prices will either be the same as now or higher by July 2011, falling back from the 82% recorded in our April survey.
The results are taken from responses to our quarterly question - “Where do you think average house prices will be one year from now?” – providing a first major insight into the property market outlook of potential home-movers in Greater London since the change in government and announcement of austerity measures.
Miles Shipside, commercial director of Rightmove, comments: “A 10% drop in people expecting prices to be higher in a years’ time is a significant shift. However, 72% of people in Greater London still believe that prices will either be the same or higher in 12 months’ time, indicating expectations of price stability in the medium-term. This suggests that either the Governmentcuts have not yet bitten hard enough to knock the inherent belief in property as a long-term safe-bet, or that there is a strong sense that the property market’s ‘dark days’ are behind us”.
Overall the survey indicates a degree of confidence that the new Government’s austerity measures will be bearing fruit in a years’ time. The medium-term view of the majority of respondents appears to be that by next summer, the immediate concerns of property oversupply, mortgage famine, and the personal financial pain of the recovery process, will have eased. However, 23% actually believe prices will be lower one year from now, though this ‘nervy minority’ has increased from 14% last quarter.
Shipside adds: “The ‘price-optimists’ still out-number the ‘price-nervy’ by around two to one in Greater London, but with austerity measures starting to bite, a growing nervousness is to be expected. Given that house prices are anticipated to fall in the second half of 2010, it is reassuring that a bullish 72% believe that house prices will recover to be the same or higher by the summer of 2011. This is largely dependent on the return of mortgage availability which, unfortunately for frustrated would-be home-movers, may prove to be a longer game than they anticipate”.