Britons prefer fall to rise in house prices

| May 12, 2008 | 0 Comments
Britons prefer fall to rise in house prices

A recent survey conducted for the BBC’s “Truth About Property” programme has found that more Britons want house prices to fall than to rise.

The survey was undertaken by ICM and involved 1,005 respondents. Its findings challenge the widely held assumption that house price falls are overwhelmingly unpopular.

Of those questioned, 28% were happy to see property prices decline, compared to 22% who were hankering after a return to house price inflation.

Meanwhile, 46% of respondents said they wanted UK house prices to remain static.

The BBC’s latest “Truth About Property” series, which will be screened this week, investigates the concept of the “crash-proof” homeowner, who could actually benefit from a fall in house prices.

While first-time buyers are frequently cited as the group most likely to benefit from a property market crash, existing homeowners who want to move up the housing ladder can also gain.

Assuming that property prices fall to a greater extent at the higher end of the market, those moving to a more expensive property will need to borrow less during in a deflationary period.

The survey also challenges fears that a fall in house prices unnerves consumer confidence.

Sixty per cent of those questioned said that a 10% decrease in house prices would make no difference to their spending habits, indicating that consumers are more nervous about rising food, fuel and mortgage payments that a slip in property prices.

However, 38% agreed that such a fall would act as an incentive to spend less.

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