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House price confidence low but base rate rise no concern: Halifax

Expectations that house prices in the UK will rise in the next year are at the lowest level since 2013, the latest Halifax Housing Market Confidence Tracker reveals.

Half of those surveyed expect house prices to rise over the next year, the same as autumn 2017 and remaining at the lowest level since April 2013 (45 per cent).

In more positive news, fewer people are now negative about the housing market, with 17 per cent predicting a fall in prices over the next year, down from 20 per cent six months ago.

A total of 26 per cent expect prices to stay flat.

Mooted base rate increases were not mentioned as a concern for most mortgage holders, with less than a third of borrowers (29 per cent) stating that a rise could affect their ability to meet their monthly repayments, a drop from 42 per cent in 2014.

On being asked how much monthly mortgage payments would have to increase by before they would struggle to meet them, almost half (47 per cent) said above £150 or that they would face no difficulties.

Only 5 per cent felt that an increase of £24 or less a month would be an issue, with a quarter point increase on the average mortgage (£156,000) equating to around a £17 rise in average monthly payment.

Halifax managing director Russell Galley says: “With mortgages the most affordable they have been in a decade, it is perhaps unsurprising that a proportion of people remain unconcerned by the prospects of a base rate rise. This research suggests that for the majority of mortgage holders, there would need to be multiple rate increases before the affordability of their repayments becomes an issue.

“Housing market optimism remains at a five year low and this echoes the subdued house price performance and activity levels we have seen since the end of last year, albeit set against a positive outlook for the majority who believe house prices will increase over the next 12 months. Indeed, it’s encouraging to see fewer people now predicting a fall in house prices compared with six months ago. Overall, we still expect house prices to rise in line with our forecasts for the rest of the year.”

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