Mortgages 

House prices ‘slowing down buyer confidence’

Persistently high house prices are causing a slowdown in buyer confidence, data from Halifax and Nationwide has shown.

According to the latest Halifax Housing Market Confidence tracker, the public has never been more optimistic about house sales, but the outlook for people looking to buy is at its lowest level since 2011.

Craig McKinlay, mortgages director at Halifax, said: “Over the past two years consumer confidence has continued to grow, however it appears that we’ve reached a tipping point with the equilibrium between buyers and sellers much more out of sync.”

The quarterly survey revealed a rise in the number of people identifying rising prices as a barrier to buying – 35 per cent cited it as the main reason for not buying, compared with 20 per cent the same quarter last year.

During the same period, concern over interest rates rose from 13 per cent to 18 per cent but deposit-raising remained the biggest perceived barrier to buying, at 55 per cent.

Of all those who took part in the survey, 57 per cent said they felt it would be a good time to sell in the next 12 months, while 32 per cent said they felt it would be a bad time. This is the largest fall in this measure since the tracker was started in 2011 , with those in London and the South East the most negative.

Positive sentiment towards selling is highest in the East and South East, where 65 per cent said they though it would be a good time to sell, compared with only 36 per cent in Scotland.

Mr McKinlay added: “The results highlight the regional variations as now people believe that it’s a good time to sell but not buy, particularly in London and the South East where house price expectations are generally higher and buyers appear to be less inclined to rush into buying a property as we have seen over the past 12 months.”

The data came as Nationwide’s House Price Index revealed that although house price growth slowed to just 1 per cent in July compared with June, the average house price is still £20,000 higher than in July 2013.

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Matthew Smith, chartered financial planner, London-based Buckingham Gate Chartered Financial Planners, said: “We are seeing a lot of optimism among housebuyers but obviously there is an issue for those trying to get on the property ladder. It does make you wonder if we are about to see the housing market peak.”