House price boost as BSA study forecasts 1.4% rise

Property prices will rise by an average 1.4% over the next 12 months, consumers predict, a stark improvement on forecasts last month of a 6.1% drop over the same period.

A Property Tracker survey by the Building Societies Association (BSA) found that, among 2,242 respondents, the average prediction for house price changes over the next year was for a 1.4% rise.

According to the study, 59% of people now 'agree or tend to agree' that now is a good time to buy, compared to 54% in March and just 27% in June 2008.

This finding was tempered by 61% of respondents who said a lack of job security remained the greatest barrier to property purchase.

Paul Broadhead, head of mortgage policy at the BSA, says: "There have been a number of encouraging signs that the worst of the property crash has passed recently and the Property Tracker shows that people think both that property prices will now rise and that now is a good time to buy.

"However, improving job security will be key to any substantial recovery of the housing market."

"People clearly recognise that with both property prices and mortgage rates having fallen, there are potential bargains to be found meaning that now is a good time to buy.

"However, for many, concerns over job security mean that they are unlikely to actually go ahead and buy."

jamie.obertelli@incisivemedia.com