Predictions of a continued increase in house prices have dropped slowly over the last three months, with only 78 per cent believing prices will keep climbing compared with 84 per cent in December.
Interest rates were seen as the major cause, with 85 per cent of respondents believing a market downturn would be attributed to further rate rises; up from 65 per cent in December.
Warren Bright, chief executive officer of Propertyfinder.com, commented: “The succession of rate rises since last August has been playing on the minds of home buyers. People’s confidence in the housing market has waned considerably in recent months. Our research indicates that while the hikes in the second half of 2006 had a slight dampening effect on the market, the shock January rise has made a much bigger impact.”
The research also found confidence among sellers was higher than among buyers, indicating those with homes on the market were expecting a good price.
However, it warned reduced confidence among buyers could lead to a slowdown in the market, with the outlook for inflation a major determining factor of this.
Mike Fry, director at Halton Insurance Services, said: “I’ve seen no difference, as there are many people here who have gained a lot of equity in their current property so they are investing in flats. The money is also going into overseas property, but Liverpool – the European Capital of Culture next year – is really seeing a boom at the minute.”
