Homeowners

Despite falling interest rates during 2001, rises in mortgage rates within the next 12 months will come as no surprise to many homeowners. This is the key finding from Legal & General's latest Moving Intentions survey.

The number of homeowners who think interest rates will rise in the next 12 months has increased since February this year when Moving Intentions was last conducted. Then 27 per cent expected rates to rise. Now the figure is 41 per cent. If interest rates do rise they are still likely to remain low compared to rates during the last five years.

Value Added
Optimism about the value of their homes remains strong among homeowners with 63 per cent thinking house prices will continue to rise over the next 12 months compared to February's figure of 58 per cent.

Moving Intentions
The number of homeowners saying they intend to move home during the next year has dropped slightly from 19 per cent in February to 16 per cent now.

History
Legal & General's Moving Intentions survey was first published five years ago in the summer of 1996 and has been conducted regularly since then to measure homeowners' expectations.

The results show that over the last five years the number of homeowners who have foreseen rises in both house prices and interest rates has fluctuated significantly. For instance in June 1997 after Labour's historic landslide election victory the number of homeowners expecting interest rates to rise over the next year hit a peak of 78 per cent but by February 2001 after nearly four years of Tony Blair's government homeowners were more confident with only 27 per cent thinking rates would rise.

In June 1996 just 27 per cent of homeowners expected house prices to rise over the forthcoming year, the lowest measure during the last five years. However during the next nine months homeowners' confidence grew markedly so that by March 1997 some 70 per cent of homeowners foresaw rising house prices, the highest level reached. Since that time between 60 per cent and 70 per cent of homeowners have been optimistic about house prices although there was a noticeable dip in December 1998 when only 38 per cent of homeowners thought house prices would rise over the next year.

Despite homeowners' changing expectations for house prices and interest rates this doesn't appear to have unduly influenced their intentions to move home. In general over the last five years a steady 15 to 20 per cent have indicated that they intend to move within the next 12 months.

Stephen Smith, Housing Marketing Director said, "The fluctuating views of homeowners towards interest rates and house prices which have been measured since Legal & General began conducting Moving Intentions indicates how emotional these subjects are - very much the topic of discussion over a pint in the pub or around the dinner table. Common sense and rationality still prevail though when it comes to deciding to move home. Our research shows this decision is influenced much more by practical issues such as a growing family, a job change and the need for a bigger home."

Bookmark with:

• Delicious
• Digg
• reddit
• StumbleUpon

Don’t know what this is?

Read the 50connect Guide To Social Bookmarking.