Confidence in European house prices is rising, but the temptation to over-stretch financially is putting consumer finances under pressure.
House price expectations have leapt in Romania (72 percent), Spain (66 percent) and the Czech Republic (65 percent) as their economies continue to grow, according to the sixth annual ING International Survey Homes and Mortgages 2017. Compared to last year’s survey, the number of Romanians who are pessimistic about price developments increased by 20 percent, the highest increase among European countries; however, they are expected to grow slightly.
In Spain, where mortgages have reportedly become easier to secure, expectations are up by 14 percentage points.
ING surveyed almost 15,000 people in 15 countries about their attitudes on the housing market, overall people across Europe are feeling more bullish. The majority of consumers (59 percent) believe that prices will rise over the next 12 months; confidence is up by 3 percentage points from last year – the first rise in two years
On the other hand, expectations in the UK have plummeted. The proportion of people who believe house prices will rise over the next 12 months is down by 13 percentage points since 2016, from 57 percent to 44 percent.
”People across Europe are finding housing expensive; many have paid at the top of or even above their budget for their home, and some have higher-than-expected running costs too. The result is many are feeling the pinch and finding it difficult to pay their rent or mortgage each month,” Nathalie Spencer, ING behavioural scientist commented, adding: “When housing is expensive people have less available for saving or investment, which may leave them vulnerable if faced with unexpected income or expenditure shocks. Planning and sticking to a budget is crucial when buying and renting a home and will help ease pressure on the purse strings in the long term.”