Property demand slumps

By JO THORNHILL
Updated:

 

DEMAND for property has plummeted in the past month and could dive by around 25% before the end of the year, according to the latest research by Alliance & Leicester.

A&L?s findings, from its quarterly 'movingimproving' survey, are the first evidence that consumer confidence has suffered a knock in the wake of the terrorist attack of 11 September, and wider global economic slowdown.

A&L found that the number of people planning to move in the next 12 months fell from 7% to 5% in the week following the attack on the US.

It said the decline could cause demand for property to fall by up to 25% this autumn and it is unlikely to pick up again quickly.

And the London market could be the worst hit. Demand for house purchase in the capital has almost halved in the last quarter, according to A&L?s findings, falling from 12% to 7%.

Geoff Mozley at A&L says: 'This is the first time in a year that our research has pointed to a significant decline in homebuyer confidence.'

However, he added: ?The current global crisis has had an immediate impact on what was already a cooling market although it is too early to say whether this is a knee-jerk reaction, or what the true impact may be on house prices in the autumn months.?

The bank?s quarterly surveys show that there has been a steady decline in confidence from the start of the year. In June 8% of people surveyed said they planned to move, while in February it was 9%.

Research released by Halifax last week also revealed that house price inflation slowed in September.

The mortgage bank said the price of property failed to increase at all during September, and annual house price inflation slumped from 10.9% to 8.3% in a month.

In contrast, figures from Nationwide showed a slight increase in house prices.

A&L interviewed 2,000 people between 5 September and 9 September and another 2,000 between 12 September and 16 September.

House prices grind to a halt

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