October 26, 2017 / 11:02 PM / a year ago

Confidence in UK house price outlook hits 5-year low - Halifax

LONDON, Oct 27 (Reuters) - Public confidence in the outlook for British house prices has dropped to its lowest in nearly five years, weighed by pessimism about the economy rather than the prospect of higher interest rates, a survey showed on Friday.

Mortgage lender Halifax’s house price optimism balance dropped to 30 points in October, down from 44 points in the previous survey published in April and marking the weakest reading since December 2012.

British house price inflation has slowed to an annual rate of 5.0 percent of August from around 8 percent just before last year’s Brexit vote, according to official figures, and an industry survey earlier this month showed property valuers have the gloomiest outlook since June 2016.

“Housing market optimism has declined significantly over the past year, with almost half of people expecting a general slowdown in the market,” said Russell Galley, managing director of Halifax Community Bank.

Potential home-buyers listed a lack of money for a deposit and worries about job security as the top barriers.

Although most economists polled by Reuters expect the Bank of England will raise interest rates next week for the first time in more than a decade, only 15 percent of those surveyed saw this as a major barrier to buying a house.

Given this, Galley said Halifax does not expect a rise to have a significant effect on demand for property.

As with other housing market surveys, the Halifax report picked out London as Britain’s weak spot.

Halifax’s survey was conducted by pollster Ipsos MORI between Sept. 22 and Oct. 1.

Its separate monthly gauge of British house prices published earlier this month showed momentum picked up in September, although economists were sceptical that it marked the start of a sustained upturn. (Reporting by Andy Bruce, editing by David Milliken)

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