Consumers are feeling increasingly uncertain about the wider economy, and more than half of people do not expect the recent budget announcements to make any difference to people looking to buy (53%) or sell a home (55%).
Despite this downward trend, a clear majority of people (65%) still believe that average UK property prices will be higher rather than lower 12 months from now, double the 32% recorded five years ago.
However, the proportion who are unsure of the direction that house prices will go has risen six points, the first time it has hit double figures (13%) since spring 2013, suggesting there is growing uncertainty around the property market.
There has been a small rise in net selling sentiment since December 2015 from +26 to +31. Now, 56% of people think the next 12 months will be a good time to sell compared to 25% who expect it to be a bad time to sell.
However, buying sentiment has dipped from +23 to +18 – the lowest it has been since September 2014.
There are marked differences when buying sentiment is broken down regionally. When asked whether the next 12 months would be a good time to buy a property, sentiment is most positive in Scotland (+41). It is lowest in London (-19), Wales (+7) and Southern England (+18).
Being able to raise enough deposit remains the biggest perceived barrier to people buying a home, with over half choosing this as a reason from a list (52%, down by 6 points from December 2015). Job security remains the number 2 reason, at 40%.
The proportion of those considering rising property prices to be a barrier remains on 37%. UK average house prices now stand at £214,8112 following a 10.1% annual increase.
Martin Ellis, Halifax housing economist, said:
“We are starting to see growing pessimism amongst consumers in the general economic outlook for Britain. However, the ongoing acute supply/demand imbalance in the property market continues, which together with continuing low interest rates and a healthy labour market, indicate that house prices are likely to continue to grow in the coming months.
“As a result, the gap between house price optimism and economic confidence is at its widest in five years, but both are tracking downwards.
“Difficulties in raising a deposit, concerns about job security and high property prices remain the main barriers to people buying a home. Of these, rising property prices is clearly much more of an issue for people than it was five years ago.”
