According to Halifax, the month of February provided evidence that buyers are once more confident that house prices will continue to rise over the coming year. Based upon the results of the lenders confidence tracker survey, 60 per cent of those people polled felt positive about the housing sector. Most noteworthy were the views of buyers and sellers, whose confidence appears to be at a record level.

The director for Halifax mortgage, Craig McKinlay noted: “With inflation now at its lowest level since records began and the chances of the next interest rate change reportedly just as likely to be down as up, consumers are feeling more optimistic about the housing market again.”

In referring to the seasonal nature of the markets, McKinlay gave a note of caution that long term confidence was vital. He said: “The traditional slow start to the year for the housing market has already begun to give way to increased activity, but consumers remain relatively cautious. For sustainable long-term growth we need a period of stable growth and a more comprehensive house building programme.”

Despite the relatively positive view of the market, the poll did also reveal that borrowers are aware of the potential for major changes in the market, post-election. 57 per cent of those polled felt that a flat or gradual increase to house prices was most likely, while 43 per cent expect interest rates to rise in 2016, closing the door on the historically low rates many have become used to seeing.

Simon Butler, of Contractor Mortgages Made Easy, said: “Expectations for property value growth across 2015 were low at the end of last year, as the London market fell into stagnation. It appears that a low level of quality housing stock, and ever increasing house prices have dented the desire for many to make the move to purchase.

“However, that view point was always expected for the capital, with modest growth predicted across the rest of the UK at the end of 2014. Interest in property across the rest of the British Isles does not seem to have abated, so that forecast is certainly being proven to be true.”

On the matter of a rate rise, Butler noted that several factors are integral for the decision makers to consider. He said: “The impending election casts a shadow over the market, and will continue to even once the final polls are in. A rise in rates at this stage would be damning for the current government, and it would be potentially suicidal for confidence in the sector if the next government chose to raise rates the minute they set one foot inside Number 10.

“In addition, the flat line of the rate of inflation at 0 per cent has raised debate as to how stable the economy actually is under the Coalition. Much has been made by the Chancellor on the influence the Conservatives have had on the change in fortunes for the UK, but detractors have pointed out that a lack of wage increases for UK work forces has created a vast gap between the cost of living and the monies people have available to cover the bills.

“There appears to be considerable fear that a rate increase at the wrong time could bring the whole economy back to a standstill. It will be interesting to see how the Bank of England and the next government manage the timetable for raising rates.”

Article By: Mark McBurney, Senior Mortgage Consultant at Contractor Mortgages Made Easy

Media Contact: Raman Kaur, Public Relations Manager

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