House price rise hopes boosted as recession ends

Published 26th Jan 2010

Britons appear more hopeful about house prices this year than they were at the start of 2009 Photo: PA Most Britons believe that house prices will rise this year as the country awaits official confirmation that the worst peacetime recession is finally over.

A survey by Rightmove, the property website, found that 53pc in the UK believe house prices will rise over the next 12 months, compared with just 10pc at the beginning of last year.

Manufacturing confidence slumps to near 30-year low, CBI saysThe sharp upswing in confidence about one of the worst affected sectors during the recession comes prior to the publication of figures tomorrow that are expected to show the economy started growing again in the last quarter of 2009.

Economists are predicting that the Office for National Statistics will say that gross domestic product increased by 0.4pc, which would mark the official end of the recession following six quarters of contraction.

It is hoped that an increase in industrial production and services sector output has helped Britain out of recession, albeit later than the world’s other major economies.

A separate survey out today by Nielsen and the British Retail Consortium found that more people were feeling more positive about their job prospects and personal finances, driving consumer confidence up for the third consecutive quarter.

However, despite the flurry of positive news, economists have warned that growth is likely to be weak this year, and that looming tax rises and spending cuts to reduce a record deficit will provide a tough environment for businesses and consumers for years to come.

Miles Shipside, commercial director at Rightmove, said positive consumer sentiment came as a surprise considering the political and financial uncertainty ahead.

“Given the looming election and the talk of pending austerity packages ahead, this consumer survey highlights a surprisingly positive property price outlook,” he said.

The public are only expecting modest rises this year, after both Halifax and Nationwide reported a near 6pc increase in house prices in 2009, following sharp falls in the early part of the downturn. However, Rightmove said that the shift in the public’s expectations was significant because positive price sentiment played a major role in any housing market recovery and was an encouraging indication of how prices might perform.

Source: ' Telegraph '

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