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First-time Buyers

House price optimism rebounds

Adam Williams
Written By:
Adam Williams
Posted:
Updated:
25/03/2015

Optimism in the housing market increased in February on the back of lower inflation and steady interest rates.

Research by Halifax found optimism had from an 18-month low at the start of 2015 to rise to +60 points in February.

It said low inflation and a belief that the Bank of England would not raise interest rates in the near future were the biggest factors.

More than half of people surveyed (57%) said they predicted house prices would be flat or rise slightly in the next year.

Despite messages from the Bank of England that a decrease in interest rates is just as likely as a rise, some 43% of consumers believed interest rates would be higher at this point in 2016.

Craig McKinlay, mortgages director at Halifax, said the market was already warming up following the traditional slow start to the year.

“With inflation now at its lowest level since records began and the chances of the next interest rates change reportedly just as likely to be down as up, consumers are feeling more optimistic about the housing market again,” 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.”