Confidence and house prices up in South West, writes Nigel Lewis of Zoopla.co.uk
Few people realise how important confidence is to the property market and that, though good looks, position, interiors and a pretty garden help sell a house, what shifts property is confidence.
The more confidence there is about, the higher prices are and the quicker a house or apartment sells. Take early 2007 for example. Confidence was high and the prospect of a financial meltdown looked unlikely; the property market was booming.
Few people could predict that, a year later, almost all the confidence in the property market would be gone, the number of homes sold each year would halve and prices would drop by between ten and 20 per cent. In some areas, by much more.
Confidence returned in early 2010 but the Euro crisis put a lid on that, so where are we now?
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The latest confidence survey by property website Zoopla.co.uk shows that confidence is on the rise, albeit still much lower than the high-rolling early Noughties.
Its survey shows two-thirds of homeowners expect British houses prices to rise over the next six months, and increase slightly on last year, and that prices will rise by 3.4 per cent nationally and by nearly five per cent in London.
This has yet to feed through to the number of houses being sold or to prices. Prices continue to drop or are flat in six out of England's ten regions with only the South West, East Midlands, the South East and East of England showing signs of house price growth. The number of houses being sold has been wobbly too – weakening a bit during the Summer compared to last year.
The big challenge for anyone selling a property is that, while confidence is creeping back, it remains a buyer's market and while that remains, prices will continue to flat-line or drop as the number of homes for sale outnumbers buyers.
The prime market could do with some confidence too – asking prices dropped during July and August for properties in the top 25 per cent of the market, a market that had so far survived the recession unscathed and, in many areas, boomed.
But if Zoopla.co.uk's survey is accurate then the autumn and run-up to Christmas may see a property market that's finally showing some signs of revival. We just need our friends in Europe to keep a more steady hand on the tiller.