House price expectations split across the UK

House price expectations split across the UK

The latest data on House Price Sentiment from Knight Frank and Markit Economics has revealed that households across the UK perceived that the value of their home rose in February.

Some 23.2% of the 1,500 households surveyed across the UK said that the value of their home had risen over the last month, while 4.1% said that prices had fallen. This resulted in a HPSI reading of 59.6.

This is the thirty-fifth consecutive month that the reading has been above 50. Any figure over 50 indicates that prices are
rising, and the higher the figure, the stronger the increase. Any figure below 50 indicates that prices are falling.

February’s reading was the highest recorded by the index since October 2014, indicating that households perceive that the value of their home rose at its strongest rate since then. However, February’s reading remains well below the peak of 63.2 reached in May 2014, reflecting the easing in average UK house price growth seen since then. Households in all of the eleven regions covered by the index reported that prices rose in February, led by households in London (68.1) and the East of
England (62.3).

The current sentiment index was lowest for Scotland (51.7) and the North East (53.0), indicating that households in these regions perceived the most modest rise in prices across the UK in January.

Outlook for house prices

The future HPSI, which measures what households think will happen to the value of their property over the next year, fell in February to 69.8, from 70.5 in January. While still indicating that households across the UK expect the value of their home to rise over the next 12 months, the future HPSI remains below its peak of 75.1 reached in May 2014.

There remains a clear north-south divide in terms of the outlook for house prices, with households in Southern England more confident about future growth over the coming 12 months.

Indeed, households in the South East were the most confident that prices will rise (78.7), followed by Londoners (77.8) and those in the South West (74.1).

In Scotland (62.0), the North East (60.6) and Wales (62.5), expectations for future price growth remain positive, but are more subdued.

Those who own their home outright are the most confident that prices will rise over the next year (75.4), followed by mortgage borrowers (75.2).

Gráinne Gilmore, head of UK residential research at Knight Frank, said: “The HPSI indicates that house prices are set to
continue to tick up modestly in the coming months. The market is being underpinned by the solid economic recovery and ultra-low interest rates – which now look as if they will stay put for some time to come. However a key dynamic of the UK housing market is that it is highly regionalised in terms of price movements, something which is highlighted by the HPSI.

The average annual spread of future HPSI readings – the difference between the lowest and highest readings across the regions – reached a new high this month, with households in the South of England expecting stronger growth than those in the North.

This signals that the regionalised nature of the market is unlikely to unwind in the short term.”

Tim Moore, senior economist at Markit, said: “February’s survey highlights a continuation of the steady upward trend in UK house price sentiment from the pre-election lows seen in early 2015. While pay growth has been sluggish and the economic outlook weakened in recent months, a resultant expectation that interest rates will stay low for longer seems to have boosted UK house price perceptions at the start of 2016.

In fact, survey data from Markit indicates that less than half of UK households (46%) expect a Bank of England rate rise over the next 12 months, down sharply from 71% in January and the lowest proportion since October 2013.”

Join our mailing list:

Leave a comment

Latest Comments

daniel black
daniel black 25 Oct 2016

I've been keeping a close eye on what the effect of Brexit has been on the rental market and it's a very mixed bag. Whilst the majority of the news focuses on London's market. I think this time next year...

view article
Northerner 20 Oct 2016

Any views from outside the M25? No wonder politicians can't get the housing big picture when everyone seems to think that London is the yard stick, when it absolutely is not.

view article
Sean Lees
Sean Lees 13 Oct 2016

I think that the pest control really depends on the situation. If the tenant moved in and found an infestation that needs pest treatment service, I think it's more reasonable that the landlord should pay...

view article
Kevin 13 Oct 2016

Please Sian Berry Dan Wilson Craw LANDLORDS DO NOT WANT TO RAISE RENTS They are being forced to because of Section 24! An unfair, punitive tax hike that will be a disaster Green Party, Generstion...

view article
Fletcher88 11 Oct 2016

Absolutely agree! Moreover property prices edged up with 0.7% this month as the market recovered from the initial Brexit hit

view article
Gary Das
Gary Das 06 Oct 2016

A lot of lenders (especially the high-street banks and lenders people approach first) could do more to accommodate for the self-employed. It can really be a struggle, as I found out myself last year when...

view article
richardrawlings 04 Oct 2016

Not sure I understand this! If Basildon and Hemel rose 68% and 52% respectively, why do they not appear in the top ten list, which appears only to feature those in the minus 20's!! Is it me?

view article
luxus 27 Sep 2016

It can be stressful. More clarity is needed on the process, from a customer perspective and consideration should be given to using the Scandinavian model where the sales process is much quicker.

view article
Melissa_Green 26 Sep 2016

Green belts are normally designated around capitals and other major cities and conurbations and their aim is to prevent urban sprawl by keeping land permanently open. The essential characteristics of green...

view article
Jimmy_McCoy 16 Sep 2016

I think that the main reason to buy garden purchases in last minute is because people always search for the best deal. In summer months there are abundance of seasonal goods and it means more low cost

view article
Jimmy_McCoy 16 Sep 2016

Buying a home often is more expensive than you expect. There are lots of hidden costs such as: stamp duty, surveys and valuations, mortgages etc. that can add more than 10% to the total bill

view article
Homebuyerconveyancing 15 Sep 2016

We are seeing a massive influx of Homebuyers using online Estate Agents. The winners are the online portals that still aim to manage the customer journey to homeownership. They provide a valuation service,...

view article

Related stories

More articles from Property

Buy-to-Let Roadshow 2016

21st-24th November

4 days
7 specialists
4 locations
Free to attend

Click here to register now