"Confidence with the housing market is holding up well, possibly due to other factors such as a shortage of available housing."
Confidence in the UK housing market has stabilised to a "new lower normal" following a record decline after the EU referendum result, according to Halifax research.
The survey, which tracks consumer sentiment on whether house prices will be higher or lower in a year’s time, has shown a small improvement (+2 points) from a net +42 in October 2016 to +44.
The lowest level ever recorded was -2 in October 2011 after a period of declining house prices – the only time it has ever been in negative territory.
Nearly six in 10 (58%) expect the average property price to rise in the next 12 months, compared to just one in 10 (14%) who expect prices to fall. However, this compares to a record high of 72% who were anticipating price rises in May 2015.
Among those who expect the average price to rise, there has been a shift towards expecting more modest rises; those expecting rises of up to 5% have increased from 26% to 30% since October. Over a quarter (28%) expect prices to be higher by 5% or more.
Martin Ellis, Halifax housing economist, said: “House Price Optimism is little changed since the October 2016 measure, which is significant because it was the first post-Brexit survey and recorded the steepest fall since the tracker began. The latest results suggest that consumer confidence in the housing market is potentially settling into a new lower ‘normal’.
“This sentiment echoes the slowdown in the annual rate of house price growth, which has more than halved over the past 12 months.
“We are seeing a renewed drop in confidence amongst consumers regarding the general economic outlook, which is coinciding with the UK Government starting its two-year period of EU exit negotiations. The gap between house price optimism and economic optimism has only been bigger once – March 2016 – indicating that whilst there is greater consumer uncertainty over the wider economy, confidence with the housing market is holding up well, possibly due to other factors such as a shortage of available housing.”