Homes and mortgages 2014: House price optimism rising

The third annual ING International Survey on Homes and Mortgages asked almost 13,000 people in Europe – and 1,000 in the United States – their expectations about house prices, how they are coping with housing costs, their satisfaction with their commute and more.

The largest increase in “house price optimism” is in the Netherlands, where the share saying they think house prices will rise over the next year more than doubled between the ING International Survey on Homes and Mortgages 2013 and this year. Although attitudes have not changed as dramatically year-onyear, the United Kingdom and Turkey have the highest share who think house prices will rise over the next year, while expectations of a rise are less common in Italy and Spain.

Houses are seen as expensive by the majority of people in Europe – and renters are much more likely than owners to think this is the case. In 11 of the 14 countries surveyed renters are also more likely than owners to find it difficult to pay their housing costs each month.

The view that “house prices never fall” remains remarkably widespread – leading to the question, “is this the mortgage market’s most pervasive myth?”. Moreover, 60% of people in Europe who think house prices are expensive expect prices will rise over the next year. This result seems perverse and may indicate recent experience dominates expectations of house price changes in the short term.

For about three-in-ten people in Europe, the essential expense of paying mortgage or rent each month is “difficult” to manage, rising to a survey high of 46% in Spain, with Romania, Poland, Italy and Turkey also well above the weighted average. Given the importance of accommodation to safety, security and happiness of individuals – and the toll widespread mortgage defaults can have on global financial stability – these results might be viewed as a warning.

When asked where the responsibility lies when deciding how much mortgage to take, only 35% indicate it is with them, with the bulk saying it is a joint responsibility between “me and my bank”. This is in contrast to responses to a question on general financial decisions in a earlier ING International Survey to which 73% indicated the responsibility lies with them not with their bank. Likewise, during times of financial hardship when mortgage repayments cannot be met, the majority would want to work with their lender to find a solution. Getting a mortgage is not seen as “too easy” even for those who cannot afford it however, there is fear that banks are putting mortgage sales ahead of customers’ welfare in many countries.

When asked which country in Europe is ideal, Sweden is the European favourite for raising children – other than the respondents’ own countries. For making a career, Germany is ranked top after respondents’ own country and for retiring, the favourite is Spain. The most important factors when choosing where to live include close proximity to facilities (such as shops, transport and entertainment), cost and safety – rather than living in a fashionable location.

London is this survey’s “commuting capital”, with commuters there travelling 45 minutes on average one way, door to door. People in Amsterdam, where the average commute comes out at just 26 minutes, are the most satisfied with their travel time.