House market off to a bullish start

January 03, 2002

Britain's homeowners and buyers have started the year in bullish mood, with a new survey showing that half the population are confident that the value of their property will increase over the next 12 months. Only 6% believe the value of their home will fall.

The latest quarterly survey from Yorkshire Bank also found that nine out of 10 people who intend to buy a house in 2002 say the economic climate post-September 11 will have "no effect whatsoever" on their plans. One in four people intend to move in 2002 - unchanged from the bank's September findings.

A bank spokesman said its nationwide survey of more than 2,000 adults showed that homebuyers were shrugging off concerns about a global economic slowdown.

The small minority of people who believe their property may start to decrease in value has held steady at 6%, he added. Homeowners in London and the south-east are the most pessimistic about the housing market's fortunes, but only one in 10 believe the value of their home will fall.

A regional breakdown showed that the north-west has seen the number of people looking to move in the next 12 months double since September to 34%. By contrast, Wales and the north both saw a small drop in the number of people intending to buy or sell a property in 2002.

While most people were confident about house prices, almost half the population believes the cost of borrowing will rise in the coming months. Some 46% of those questioned think interest rates will rise this year, while 15% believe they will fall further.

The survey also found that the number of people looking to purchase a second home in the UK or abroad had trebled over the last quarter, suggesting that stock market falls and low interest rates have prompted growing numbers to seek out alternative havens for their investment cash.

The bank's findings follow predictions from Halifax and Nationwide that house prices will rise by 5% and 6% respectively in 2002.

Paul Fegan, Yorkshire Bank's general manager of personal financial services, said: "The prospects for the UK housing market over the coming year look rosier than some in the industry have been predicting, according to our independently commissioned research."

Rupert Jones