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Homeowners 'resolute' in face of house-price falls

18/09/2007

Britain's homeowners will not be forced into panic-selling if the UK residential market sees major negative growth, a report claims.

Research from the Building Societies Association (BSA) found that only one per cent of homeowners would immediately sell their homes if house prices began to fall considerably.

The survey of 1,000 people who have bought or considering buying property in the last year found long-term optimism among the causes for their apparent stability. Nearly nine out of ten believed prices will ultimately rise over the course of a decade or more.

Furthermore, the poll shows buying a property as a place to live remains the over-riding motivation. Only 45 per cent viewed making money from their house as a priority.

The BSA argues this means Britain's residential property market, which is starting to drift into moderate negative growth after 2006's dramatic advances, does not face a major risk of sudden collapse.

"Consumers have a realistic view of the property market and house price expectations have not fuelled a price boom," explained BSA director general Adrian Coles.

"For most, the primary motivation for buying a property is derived from the satisfaction of owning a home, rather than the financial motivations of capital appreciation.

"Reassuringly for those critics, the results prove that the majority of buyers have put considerable thought into their purchase, and have entered the housing market with their eyes wide open."

Homeowners' optimism may prove a little unrealistic, however. Most expect an increase of between three and five per cent in the next 12 months, although 71 per cent said they realised prices could slip in the next year.