Huge u-turn in consumers' house price outlook

More than half of consumers now expect house prices to be higher this time next year, a survey suggests, representing a huge change in sentiment from earlier in 2009.

According to the latest Rightmove Consumer Confidence survey, 54% of consumers now expect average house prices to be higher in 12 months' time. A similar study conducted in Q1 this year suggested 69% expected prices to be lower at that time.

Just 11% of those surveyed expect house prices to fall over the next year. The proportion of respondents believing it is currently a good time to buy has held steady throughout the year at around 70%.

The number of those feeling it is a bad time to sell a property remains high at 67% of respondents, though sentiment has shown a modest improvement since Q1 when 88% of those surveyed were of the opinion it was a bad time to sell.

Miles Shipside, Rightmove commercial director, says: "Respondents' u-turn proved to be an uncannily accurate prediction of how the year unfolded.

"We should therefore pay careful attention to this latest set of results when looking ahead to what is in store for the property market in 2010."

Stock shortages have been one of the prominent features of 2009, with the numbers of new sellers coming to market around 30% below 2007 levels, according to Rightmove.

Looking ahead to next year, there is a definite expectation amongst respondents that it will be a better time than now to put their property on the market.

Only 5% state the current climate represents a good time to sell, whereas 54% state it will be a better time to do so in 12 months. Just 34% feel conditions will be about the same as now and 7% think it will be a worse time to sell this time next year.

Shipside adds: "The lack of new sellers coming to market should ease to a degree in the latter part of next year according to our survey.

"However, it falls short of a resounding vote of confidence with a significant proportion feeling that the challenging conditions sellers are currently facing will remain unchanged for some time yet."