Poll shows massive 30% sentiment swing to house price plunge
| Published: 14th February 2008 14:47 |
The latest House Price Consumer Confidence Poll (HPCC Poll) says that British public now predict a 5.5% fall in house prices - the gloomiest forecast since the poll began in 2004.
The latest House Price Consumer Confidence Poll (HPCC Poll) says that the British public now predicts a 5.5% fall in house prices - the gloomiest forecast since the poll began in 2004. Only six months ago, the public predicted fall of just 0.6%.
The new HPCC Index indicated that consumer confidence has taken a massive bashing, and that 59% of people believe that house prices are on the slide, compared with only 18% who predict prices will rise. This is a much more pessimistic picture than six months ago, when 30% of people predicted a fall and 48% a rise.
The survey, a poll of 11,000 MoneySavingExpert.com users, indicates that if consumer faith in the future of house prices is correct, house prices have peaked and homeowners should brace themselves for a downturn.
Main HPCC Index findings:
• Three out of five people (59%) think house prices will slide over the next 12 months.
• Just 18% of people think house prices are on the up.
• A further 18% predict house prices will stay the same over the next year.
• One-in-ten predict house prices will crash by over 20%
• Only 2% of people think house prices will increase by over 10%
• There's been a 30% swing in public opinion towards house prices dropping over the next year, compared with the same poll six months ago.
"Because the HPCC Poll measures only public sentiment and not actual house prices, it offers a unique perspective on the housing market compared with professional valuers, such as surveyors or estate agents.
"Consumer sentiment plays a huge role in determining prices. When people think prices will drop they act differently, they're far less willing to pay higher prices, and thus there's the potential for a self-fulfilling prophecy."
How the findings compare to other surveys:
• The average house price in England and Wales declined by 4% in December - the first time house prices have fallen since August 2005, according to the Land Registry. The data also shows that house prices rose by 6.7% in 2007, compared with 81% in 2006.
• In January, the average cost of a home dropped by 0.1 per cent to £180,473, according to figures from Nationwide.
