HOMEBUYER confidence in rising house prices hit a 20-month high as the year ended, new figures have indicated.
Yorkshire Bank said that, in December, 71% of consumers believed property prices would continue to rise during 2007 – the highest level of confidence since April, 2004.
It compares with just 55% who believed hikes would continue when asked during the same period last year. The number of people looking for cheaper properties which they can add value to increased from 20% fifteen months ago to a quarter in December, the report noted.
Spurred on a by the beginnings of a slower market, homebuyers are more willing to chance their luck when putting in an offer, according to Yorkshire Bank.
The lender said 21% would now make a low offer to start with, only raising it if necessary. In contrast, one in eight said they would immediately offer above the asking price on a property they liked.
Gary Lumby, head of retail at Yorkshire Bank, said: “Last year, the housing market exceeded most people’s expectations and it appears the confidence homeowners took from this has carried through to 2007.
“Although three Bank of England interest rate rises don’t appear to have dented this confidence, the market is less robust.
“We need to wait and see how it reacts to January’s unexpected rate rise.”
He added: “Buyers who are now looking for properties they can do up are using this uncertainty to their advantage by trying their luck with a lower initial offer and only raising it if necessary.
“Should these offers below the asking prices be accepted by sellers, then we may see prices levelling off.”
Despite confidence in the housing market being high, more than three-quarters of those asked said they had no plans to move during 2007.
A third of recent first-time buyers said they expected to live in their current property for the next 10 to 15 years, the survey found.
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