A third of people (33%) think house prices will rise over the next 12 months, the latest Property Tracker report showed.

This is a significant change from three months ago when only 20% thought house prices would rise.

The Building Societies Association (BSA), who published the report today (7 Dec), said this data is the most optimistic outlook since September 2022.

And it is likely to be influenced by the halt in bank rate rises, lower mortgage interest rates which are now becoming available and the fact that house prices have risen for the last three months.

The report showed that there is a corresponding shift in those who think house prices will fall in the next year.

One in four (24%) respondents believe this to be the case compared to 39% in September.

Barriers to Home Buying

The report also showed that while the biggest obstacle to homeownership continues to be mortgage affordability, the proportion of people who said this is a barrier has fallen to 68% in December, from 71% in September.

Raising a deposit continues to be a significant barrier to buying a residential property, but this is also showing signs of reducing.

This month 58% of people cited this down from 60% in September.

Lack of job security is however starting to creep up, with 22% saying this was a barrier, an increase from 19% in September.

Affordability concerns

When homeowners were asked about the affordability of their monthly mortgage payments over the next six months, the majority did not express any concern about keeping up with their housing costs.

About 85% of mortgage borrowers are confident about keeping up with their monthly mortgage payments.

These figures have remained relatively unchanged over the last year, however the proportion who said they are not at all confident increased to 5% in December.

Whilst this remains a small proportion of the total, it does demonstrate that the number of people experiencing financial difficulties is rising.

BSA said building societies and other lenders are continuing to offer practical, tailored support to borrowers who may be struggling.

Those who rent their home are a little less assured, with around three-quarters (73%) feeling confident about meeting their housing costs.

Market sentiment

The report also showeed that sentiment in the housing market remains subdued, but stable.

The proportion of people who think now is a good time to buy a property is just 16%, around the same as it has been throughout 2023.

Those who specifically think now is not a good time to buy a new home is considerably higher at 41%, rising to 46% for first-time homebuyers.