Will the housing market cool and will the property bubble burst, asks Callcredit?

Leading consumer insight specialist Callcredit Information Group has, in association with YouGov*, conducted independent research to highlight consumer views on the continuing rise in house prices and their future sustainability.

To further enhance the findings Callcredit overlaid the results with its new CAMEO UK segmentation tool to see how those views vary across different socio-economic groups.     

By using CAMEO UK Callcredit was able to categorise respondents into ten different groups ranging from ‘Business Elite’ to ‘Family Value’. Key findings of the research highlighted that:

When asked if houses prices would continue to rise?

  • 54% of the ‘Business Elite’ believed that house prises will continue to rise, providing that housing is limited and demand is high.
  • 42% of the ‘Prosperous Professional’ shared a similar view.
  • Interestingly only 29% of those in the ‘Family View’ segment agreed , who along with the ‘Cash Conscious Communities’ and those ‘On a Budget’ clearly think that house prices will crash sooner or later.

When asked if house prices were unsustainable?

  • 53% of those in the ‘Paying the Mortgage’ segment and 52% of ‘Family Value’/’Cash Conscious Communities’ believe house prices are unsustainable and that people can’t afford to pay their mortgage. 
  • Surprisingly this view was also shared by the ‘Flourishing Society’ segment where 50% agreed with the sentiment.
  • However only 37% of the ‘Business Elite’ believed this to be the case.

The CAMEO analysis on the YouGov market research shows that despite the fact that mortgage approvals have continued fall for a fourth successive month (an indicator of future sales), combined with the continued speculation within the market that property prices are set to fall and interest rates rise by 2015, the Business Elite still have confidence in the property market.

Chris McDonald, Managing Director, Marketing Solutions at Callcredit, commented: “The research and the detailed analysis delivered through the use of CAMEO UK highlights how opinions differ between different sectors of the UK population. Clearly the ‘Business Elite’ appear to be in a ‘Property Bubble’ separate from the rest of the UK market. More than half of the ‘Business Elite’ CAMEO Group, typically living in the most prestigious areas, believe house prices will continue to rise compared to less than a third in the more hard-pressed CAMEO groups such as the ‘Family Value’ and ‘Cash Conscious Communities’." 

CAMEO UK classifies every individual, household and postcode in the UK for use in customer profiling, prospect targeting, market analysis, retail planning and risk for pricing assessment and forms part of a suite of over 40 worldwide consumer classifications.

CAMEO UK harnesses the latest modelling techniques to layer intelligence from multiple levels, including data at individual, household, postcode and neighbourhood to provide the best targeting discrimination in the market. The tool has been built using data from the latest UK Census and Government Open Data sources, alongside data from YouGov and TGI. But what makes it unique to other consumer classification systems is that it is built dynamically with real-time links to Callcredit’s flagship consumer database, Define and Callcredit’s UK population map of over 50 million UK residents.

Chris added: “We have purposely built CAMEO UK in a way which will allow it to be updated to reflect key changes in life change or circumstances as it happens. Therefore unlike other classification systems on the market, CAMEO is highly responsive to the changing consumer population. The depth of detail CAMEO UK can now provide is unrivalled anywhere else in the marketplace and will widen the dimensions to consumer targeting, giving businesses across a diverse range of sectors the most granular and up-to-date view of consumers."  

CAMEO UK is overlaid onto each of YouGov’s panels, including its daily public opinion polls, meaning that users can get up-to-the-minute insights on how different CAMEO groups feel about the latest current affairs, consumer brands, politics and other topical issues.

*YouGov research was carried out between the 1st /2nd June 2014 with a sample size of 1,740 GB adults.

YouGov property prices 1

YouGov Property Prices 2

Sample Size: 1740 GB Adults
Fieldwork: 1st - 2nd June 2014