Confidence in housing market reaches two year high
13th Oct 2009
- 79% of homeowners believe home values will rise in the next six months
- 5.4% growth in average house prices predicted over next six months
- Frustrated buyers see no improvement in mortgage funding availability
- Scots most confident about house values but Northern Irish are not optimistic
Four-fifths of homeowners expect property values to rise over the next six months, according to the Zoopla.co.uk quarterly survey of housing market sentiment.
Of the 6,682 homeowners surveyed, 79% believed home values will rise, with only one in ten (11%) predicting that values will fall over the next six months. Overall, those surveyed predicted average house values in their area will increase 5.4% over the next six months, but are even more optimistic about the prospects for their own homes, which they believe will rise by 5.8% - faster than their neighbours.' Housing transactions show an 80% correlation to the Zoopla.co.uk confidence index, and lag movements in confidence by around three months, indicating that rising confidence will push transaction volumes higher in the coming months.
But homeowners' optimism for the outlook in the housing market is not shared by renters as 42% of renters surveyed by Zoopla.co.uk think house values in their area will either remain unchanged or decline in the coming six months. Renters are also least hopeful about the availability of mortgage finance with over three-quarters of renters (76%) saying it is no easier to obtain a mortgage now than three months ago. Yet, despite the difficulties in securing a mortgage, over half of renters (53%) indicated an intent to try to buy in the next six months.
Overall, homeowners believe that the clearest sign of a property market recovery is seeing the level of transaction activity in their area increase from the recent lows. The Scots are most optimistic about the housing market outlook, with 83% expecting the value of their home to rise over the next six months, compared to 79% in England and 78% in Wales. Homeowners in Northern Ireland are least confident, with almost a third (31%) predicting their home values will fall or remain flat in the same period.
Alex Chesterman, CEO of Zoopla.co.uk, said: "Optimism in the property market is climbing back to levels not seen since before the credit crunch began in 2007 and is four times higher than it was in the depths of the decline earlier this year. Confidence drives transaction volumes, which in turn drives house prices. But with lending remaining constrained, transaction volume cannot recover as strongly as demand suggests it should, and the inability of first-time buyers to get a toehold on the housing ladder is the biggest single risk to the housing market recovery.
The majority of homeowners believe their own home will rise in value at a faster pace than the average home in their local area, most notably in London and the South East, where it seems an Englishman cannot escape the view of his home as his castle. The record levels of traffic to Zoopla.co.uk, the UK's leading property market resource, with over 1 search per second recently is another strong indicator of the rising interest and confidence in the housing market."
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Notes to editors
- Zoopla invited registered users of Zoopla.co.uk to participate in this study.
- The survey was fielded from September 21st to 28th 2009.
- There were 7183 total respondents. 6682 of these were homeowners. Statistics based on a sample of this size are accurate to within +/- 1.2% with 95% confidence, if the sample is drawn at random from the population it intends to represent.
- These respondents represent the perspective of the Zoopla.co.uk user community, and could be considered to represent the population of people interested in the UK residential property market.
- All statistics are based on the full sample unless otherwise noted.
Zoopla.co.uk is a unique property website offering users information and tools to help them make better-informed property decisions. Our aim is to provide the most comprehensive source of residential property market information in the UK to help buyers, sellers, owners and estate agents alike and give them an advantage in the property market.
In 2007, following the success of bringing DVD rental to the web with LOVEFiLM.com, Zoopla founders Alex Chesterman and Simon Kain realised that the UK property market had yet to fully enjoy the benefits of the internet in terms of its ability to deliver transparency and efficiency. They set out with the mission to transform the property market for both professionals and consumers by:
- offering users FREE access to instant value estimates, sold house prices and local information and trends
- enhancing estate agents' marketing efficiency by providing exposure/leads on a pay-for-performance basis
- helping users find local agents and other property professionals to assist them in the transaction process
- letting buyers make offers on ANY UK home and owners test interest in their homes before choosing to sell
- creating an environment where anyone can ask/answer questions and share their knowledge about homes
By providing FREE value estimates for EVERY UK home, sold prices and local information as well as hundreds of thousands of property listings for sale/to rent, Zoopla.co.uk is fast-becoming the ultimate destination for users to both search for property and to do their market research. We continue to be the UK's fastest growing property website and largest and most active property community, with over a million user contributions to our website in the past 12 months alone. We also offer unique features, like TemptMe. and AskMe., which allow consumers to gain an insight into the market and discover information they won't find anywhere else. Our estate agent directory, FindAnAgent and our unique AskAnAgent feature also help guide users to local professionals directly for their expertise.
Our value estimates are calculated using a proprietary algorithm (secret formula) that we have developed by analysing millions of data points relating to property sales and home characteristics throughout the UK. The algorithm works by comparing relationships between home prices, economic trends and property characteristics in given geographic areas. Our estimates are constantly refined, using the most recent data available and a variety of statistical methodologies, in order to provide the most current information on any home.
Zoopla Limited is a privately held company with a highly experienced and proven management team, backed by well-respected angel investors and leading venture capital firms Atlas Venture (atlasventure.com) and Octopus Ventures (octopusventures.com).