More than eight out of 10 home owners in the North East expect house prices to rise in the coming months as market confidence surges to its highest level in at least four years, research has found.
Some 84% of people surveyed in the region by property search website Zoopla predict further house price hikes in the next six months, marking the highest proportion seen since its records began in 2009.
Higher rates were recorded in other regions, but the high score still points to a restoration of confidence in the property market. People typically expect prices to rise by 5.7% between now and next spring, with London home owners predicting particularly strong growth at 8.3%.
Two-thirds (66%) of those across the survey who think property prices are on the up said the level of property sales they have already seen in their local area is their main reason for believing this.
Despite home owner confidence remaining higher in the South than the rest of Britain, every region recorded an increase in the proportion of people who think prices in their area are rising. Even in areas of the North and Wales, where confidence was at its lowest, 84% of home owners believe prices are rising.
The Zoopla research was conducted between the end of September and the start of October - just after Prime Minister David Cameron announced that the launch of new phase of the Government’s flagship Help to Buy scheme offering state-backed low-deposit mortgages was being brought forward by three months.
Mr Cameron has rejected fears that the UK is heading for a house price bubble, with borrowers being encouraged to over-stretch themselves in a market where the number of houses for sale is in relatively short supply, which is putting an upward pressure on house prices. He has said the market is generally still recovering from a low base.
State-backed lenders Royal Bank of Scotland (RBS), NatWest, Halifax and Bank of Scotland all started offering loans to first-time buyers and home-movers with 5% deposits under the new phase of the Help to Buy scheme from this month. Other major lenders including Santander, HSBC and Barclays have confirmed plans to join the scheme at a later date.
Lawrence Hall, spokesman for Zoopla, said the new phase of the Help to Buy should boost confidence further “across the country” and not just in London, which has continued to attract wealthy overseas buyers looking for a safe haven to place their cash.
Office for National Statistics recently showed that even before the new phase of Help to Buy was launched, UK house prices reached a record high of £247,000 in August and the British Bankers’ Association (BBA) reported this week that mortgage approvals to home buyers are at a four-year high.
The Government’s Funding for Lending scheme, which was launched in 2012 and has given lenders access to cheap finance to help borrowers, has already had a major impact on the housing market, with the choice of mortgages rapidly increasing and lenders dropping their rates to ultra-low levels.
That growing confidence appears to have come at a time of reducing house building in the North East, however.
Latest figures from the National House Builders Confederation show that 929 new homes were built in the North East in the three months from July to September, compared to 1,169 in the previous quarter. Nationally, there was a 19% increase in new house building.