The Government has been pumping public money into subsidising home buyers to keep house prices high and protect the economy. According to the Halifax, the policy may be working. It has been running a “Halifax Housing Market Confidence Tracker” for nearly three years, and for the first time there’s more people who think it’s a good time to sell property than a bad time.
It’s a very slight difference: 51% think it would be a good time to sell, while only 39% think it would be a bad time – a twelve per cent majority. Just last September, the majority was 6% – the other way! This is, however, just what people think: there is no information on whether they actually have properties to sell, or intend to sell. Is this confidence in the sense of feeling that a house owner could sell a property and afford another, perhaps a larger one? Or is this the despair of households which have lost jobs or income and need to sell so they can downsize to something affordable and at last feel that there may be enough buyers around that this could actually happen?
There are similar responses to the question of whether it is a good time to buy: 63% of those asked said yes, while only 28% said no (a difference of 35 percentage points). Again, there is no information to help interpret the result. Are people thinking they could snap up a bargain by forcing desperate sellers to drop their prices? Or do they think there’s a lot of people selling, so there’s more homes on the market and buyers can have a wider choice? Perhaps one clue comes from regional differences: in the north east, there was a 50 percentage point lead for those who thought it was a good time to buy; set against only an 18 percentage point lead in London. That mirrors the increase in house prices: it’s harder to buy in London than in the north east, because the prices in London are so much higher.
And that brings us to what is probably a more telling point as far as house sales are concerned: overseas buyers are buying up properties in London and the south east. That’s keeping house prices in London and the south east high, which is encouraging more overseas investors to buy properties as they are confident of a high return.
Martin Ellis, housing economist at Halifax, commented: “The recovery in the housing market during 2013 has resulted in a significant improvement in sentiment towards selling a property in recent months. This shift could provide a much needed increase in the supply of properties available for sale on the market during 2014, which would help to constrain upwards pressure on house prices.”
Mr Ellis may be indulging in wishful thinking. It may be precisely the increase in the supply of properties for sale that it drawing in overseas investors and pushing house prices up, rather than constrain them.
•The Halifax survey also found a slight increase in difference between the percentage of those who thought house prices would rise rather than fall over the next year (a 66% difference in December, up by two percentage points since last quarter). Respondents reported that the main barriers in the way of buying a property were their ability to raise a big enough deposit (61%) and concerns about job security (56%).
•Full detail on the survey methodology, questionnaire and findings can be found at www.ipsos-mori.com .