Thu, 20 Sep 07
A recent BSA report into the UK public's attitudes towards home ownership reveals steadfast confidence in housing market...
The Building Societies Association (BSA) has launched a new report examining the public’s views on purchasing residential property and giving an in-depth insight into the property market trends. The report, ‘House Price Expectations,’ is based on research by Ipsos MORI, and was showcased this week at a roundtable attended by leading industry commentators.
Commenting on the report, Adrian Coles, Director General of the BSA, said: Growth in residential property prices has largely been due to a wide selection of factors including low interest rates, lack of suitable housing stock, a buoyant economy and the ingrained desire in the British psyche to own property.
Speculation is not the primary motivation for property purchases
Further reassurance was offered to the market as the report showed that the ingrained British desire for homeownership is the core reason for buying a home. More than three quarters (77%) of respondents were buying a home to live in and the primary motivation for these people was that they wanted to own a home (88%).
Making money from property purchase was important to less than half of those questioned (45%).
A fall in house prices will not result in panic selling
The report reveals that even if there were a 15% fall in house prices just 2% of homeowners would sell up immediately. Most (63%) would simply retain ownership of their property whilst 11% would retain the property with a view to selling once prices recovered.
17% said they would actually look to purchase more property in this scenario a clear indication of the strength of demand
Investors are in it for the long term
The research shows that those investing in property do so with long time horizons. Many (89%) see property as a good investment for their pension, and 89% also think that in the long run, property prices will definitely have risen.
Only 1% of investors would sell immediately if property prices fell considerably, and more than a quarter (27%) would look to buy more.
Further house price rises are expected
Expectations of future house price growth are still strong. Two thirds (65%) of consumers questioned believe that property prices are set to rise over the next twelve months, with most predicting an increase of 3-5%.
Less than one in ten (9%) expect prices to fall, whilst one in five (20%) predict they will remain static. The majority (71%) accepted that prices could fall in the next year.
Commenting on these finding, Cole commented: Consumers have a realistic view of the property market and house price expectations have not fuelled a price boom. For most, the primary motivation for buying a property is derived from the satisfaction of owning a home, rather than the financial motivations of capital appreciation.
Coles added: The findings suggest that households’ confidence in the housing market is robust and points to the stability of the market if house prices were to fall. There would need to be some shock to the wider economy, for consumers’ confidence in their ability to hold on to their property to be shaken.
To receive a copy of the report entitled ‘House Price Expectations: An insight into how people think about property purchase,’ please click on this link http://www.bsa.org.uk/publications/industrypublications/index.htm.
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