Research by the Woolwich says that consumers’ confidence in the housing market tumbled by 7 per cent in October, taking levels to the lowest for four years.
Its consumer confidence index showed that just 45 per cent of homeowners now believe their property will continue to increase in value compared to 52 per cent in September and 56 per cent in August.
Andy Gray, head of mortgages at Barclays and The Woolwich, said: “With confidence levels at the lowest for four years, the decision to hold rates came as no surprise. We expect confidence to soften further as interest rates are set to peak at 5 per cent in early 2005.”
The Halifax House Price Index shows that house prices fell by 1.1 per cent in October. Over the past year house prices have increased by 18.5 per cent with the annual rate of growth now below 20 per cent for the first time in six months.
On a quarterly basis, house prices fell by 0.4 per cent between July and October. This is the first fall on a three monthly basis since the last quarter of 2000.
Martin Ellis, chief economist at the Halifax, said: “The rises and falls we have seen in prices in recent months are part of the ebb and the flow of the market as it finds a new base.
“We expect house price growth to continue to moderate into 2005 as the rate increases and first-time buyer affordability constraints dampen demand.”
SmartNewHomes’ New Homes Index says that the average price of a new home fell by 3.1 per cent in October. It is the fourth decrease in the last six months and brings prices back to the levels they were at the end of the summer.
It reflects the market slowdown currently taking place and the high rates at the end of the last year, when the property boom began to take off.
Battling against house price fall is the London area. The index reports that the average price of a new home in London rose significantly last month as a number of housebuilders brought new developments to the market.
London had been experiencing price falls over recent months as the national slowdown hit the higher priced markets first.
