Fall in house prices 'welcomed'
Friday, May 16, 2008
More people want house prices to fall than to rise, BBC research has found.
That is the surprise finding of the first poll to test the assumption that house price falls are unpopular and therefore politically damaging.
Barely a fifth of people want house prices to rise - fewer than the number of people who want them to fall.
The poll of 1,005 people, commissioned by the BBC, found that only 22% said they wanted prices to go up while 28% said they wanted house prices to fall.
The poll, carried out by ICM, canvassed people over a three-day period from 25 to 27 April.
'Crashproof'
Nearly half of the people who responded, or 46%, said they wanted them to stay the same. The findings cast doubt on whether the political and economic damage done by falling prices is as serious as has been feared.
The poll was commissioned after makers of the BBC2 TV series The Truth About Property came across a surprisingly large number of people who wanted house prices to drop.
The first part of the series investigates the extent to which Britain's homeowners are "crashproof" - meaning they could withstand or even benefit from price falls.
What people in Cambridge think about house prices
Price falls bring economic benefits not just to first-time buyers but to any homeowner who wants to trade up to a larger or more valuable property.
The price of the place they are selling may fall. But, all else being equal, the more valuable property they want to buy will fall by a larger amount - meaning they have to borrow less to "climb" the property ladder.
Confidence knocked?
Economists are concerned that if prices fall too quickly it may knock consumer confidence, already at its lowest for 15 years, leading to reduced spending that could worsen the current economic slowdown.
But another finding for the programme questions whether it is house price falls that have damaged consumer confidence - as opposed to other factors such as food, fuel and mortgage payments.
Respondents were asked if a fall in house prices of more than 10% would make them more likely to cut back on household spending such as clothes, leisure and groceries.
More than 60% of people said it would either make no difference or would make them likely to spend more.
Only a minority - 38% - said it would make them more likely to cut back.
Nearly a third of homeowners have no mortgage on their homes - meaning no risk of negative equity.
And the programme reveals to what extent house prices would have to fall to put the average borrower in negative equity.
The Truth About Property is broadcast on Monday, 12 May and Tuesday, 13 May at 2000 on BBC Two.
For more info see the original BBC article.
That is the surprise finding of the first poll to test the assumption that house price falls are unpopular and therefore politically damaging.
Barely a fifth of people want house prices to rise - fewer than the number of people who want them to fall.
The poll of 1,005 people, commissioned by the BBC, found that only 22% said they wanted prices to go up while 28% said they wanted house prices to fall.
The poll, carried out by ICM, canvassed people over a three-day period from 25 to 27 April.
'Crashproof'
Nearly half of the people who responded, or 46%, said they wanted them to stay the same. The findings cast doubt on whether the political and economic damage done by falling prices is as serious as has been feared.
The poll was commissioned after makers of the BBC2 TV series The Truth About Property came across a surprisingly large number of people who wanted house prices to drop.
The first part of the series investigates the extent to which Britain's homeowners are "crashproof" - meaning they could withstand or even benefit from price falls.
What people in Cambridge think about house prices
Price falls bring economic benefits not just to first-time buyers but to any homeowner who wants to trade up to a larger or more valuable property.
The price of the place they are selling may fall. But, all else being equal, the more valuable property they want to buy will fall by a larger amount - meaning they have to borrow less to "climb" the property ladder.
Confidence knocked?
Economists are concerned that if prices fall too quickly it may knock consumer confidence, already at its lowest for 15 years, leading to reduced spending that could worsen the current economic slowdown.
But another finding for the programme questions whether it is house price falls that have damaged consumer confidence - as opposed to other factors such as food, fuel and mortgage payments.
Respondents were asked if a fall in house prices of more than 10% would make them more likely to cut back on household spending such as clothes, leisure and groceries.
More than 60% of people said it would either make no difference or would make them likely to spend more.
Only a minority - 38% - said it would make them more likely to cut back.
Nearly a third of homeowners have no mortgage on their homes - meaning no risk of negative equity.
And the programme reveals to what extent house prices would have to fall to put the average borrower in negative equity.
The Truth About Property is broadcast on Monday, 12 May and Tuesday, 13 May at 2000 on BBC Two.
For more info see the original BBC article.
Labels: Andrew Verity, House market, House prices survey, ICM, The Truth about Property
