Majority of Britons think property is over-valued

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The Independent Online

The majority of Britons think property is over-valued, but only one in four people are predicting further house price falls, a survey suggested today.

Around 25% of people think house prices will drop during the coming year, down from 32% who were expecting them to slide further when the same research was carried out during the first quarter of the year, according to property website Rightmove.co.uk.

Instead, 40% of people think prices will be broadly unchanged 12 months from now, the seventh consecutive quarter during which the proportion of people expecting there to be no change has increased.

But despite predicting house prices will be stable during the coming year, 48% of people said they thought property in their area was over-valued, rising to 66% among first-time buyers.

People in London were most likely to think house prices were too high at 61%, followed by those in the South West at 53% and those in the South East at 52%.

Miles Shipside, director of Rightmove, said: "There is a growing sense that many homes coming onto the UK housing market are priced too high and this is borne out by the views expressed in this survey.

"We now have a situation where half of the UK public feel house prices are too high, yet three-quarters of the same public are expecting prices to either stay the same or increase over the next 12 months.

"This suggests the prospect of a market stand-off and rising unsold stock levels if sellers don't wise up to the house price views of their target market."

Earlier this month, Rightmove reported that the level of unsold stock estate agents had on their books had risen to its highest level for four years, after new sellers increased their asking prices for the fourth consecutive month, raising them by an average of 1.7%.

Among those who feel optimistic about house prices, 54% said they thought the economy would improve, and that this would help the property market, while 26% thought mortgages would be easier to obtain.

But 58% of those who predicted house price falls think the economy will get worse, and 23% of this group think there will be little or no change in mortgage availability.

:: Rightmove questioned 26,240 people during April.

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