Confidence in the housing market has increased to 60% in October - the highest level in 2003, a report by The Woolwich reveals
The Woolwich's consumer confidence balance has been rallying since March when it reached this year's low point of 50%. This upward trend has seen confidence reach its current level of 60%, reflected in the annual rate of house price inflation, which increased for the first time in October after falling back from March.
George Johns, economist for The Woolwich, says: “The argument that house price growth is set to slow is compelling when you factor in that the price of the average UK property looks overvalued in relation to the average income. The psychological impact of the first interest rate hike since February 2000 will be far-reaching.
“It will almost certainly be a significant brake on housing market activity, particularly as households saddled with high levels of debt begin to adjust their finances to accommodate a higher interest rate environment. People are not going to have the financial clout next year to put significant upward pressure on house prices and we believe that house price inflation will fall to around zero by the end of next year.”