UK home buyers’ confidence tumbles over high prices

LONDON — Confidence in the British housing market has tumbled to its lowest level in at least three years amid fears of over-inflated prices and a potential rise in interest rates.

Across the country, the net balance of people who believe the next year will be a good time to buy a home has plunged to 5 per cent from 34 per cent at the end of the first three months of the year, showed the quarterly Housing Market Confidence tracker issued by the Halifax bank.

The figure represents the difference between the proportion of those surveyed who are positive about buying in the next 12 months and the proportion who think it will be a bad time for buyers.

Halifax said there has been a sharp increase in people who say rising prices are a barrier to buying. About 35 per cent cited the concern compared with 20 per cent this time last year.

Worries about interest rates rising are also increasing.

Property prices in the United Kingdom have been steadily rising in recent years, supported by a shortfall in supply.

Prices in London have been particularly buoyant, with foreign investor interest acting as an additional spur.

However, data released last week showed house prices in the UK capital stagnated in July, the first month with no growth since December 2012, adding to the view that the market may have peaked. THE DAILY TELEGRAPH