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.”

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Kelvin Lloyd
Kelvin Lloyd 09 Oct 2017

IT is up, to the Planners. If they will only give permission for bungalows on certain (suitable) sites, they will be built.

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maggie swift
maggie swift 09 Oct 2017

It's just the beginning of the shocking rise.

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maggie swift
maggie swift 09 Oct 2017

I have recently read that the bungalows can provide social housing for elderly residents in London.

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zoe glover
zoe glover 05 Oct 2017

Update! Worst company I have ever dealt with. Undervalued a Cambridge property by over 100k, wont take on any evidence of valuation including a RICS valuation done 3 years ago for the very same value...

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Paul Edwards
Paul Edwards 27 Sep 2017

Its nonsense articles such as this that make it harder to get clients to realise just how difficult the market is out there. When you see Rightmove and there are more 'price reduced' then 'new' most days...

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Tom Allen
Tom Allen 20 Sep 2017

Absolutely agree with you!

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RyanGeo
RyanGeo 18 Sep 2017

A sharp correction would be a less dramatic expression to use. That is already underway in certain sectors in Reading where I practice as Chartered Surveyor

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sean benton
sean benton 01 Sep 2017

Identity theft is a thread for any profession. So,people should stay alarmed. I once take help from a letting agent and came to know that letting agents are taking every precaution to prevent fraudulent...

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Mark N.
Mark N. 30 Aug 2017

We have seen a surge in instructions over August and that should continue into September too.

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Chris
Chris 30 Aug 2017

Unfortunately, all the legislation bears its force on Landlords and ignores, naively, the effect of Rogue Tenants on the ability of landlords to keep houses in repair and offer properties for rent at reasonable...

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Christian Donovan
Christian Donovan 18 Aug 2017

The write-down on house values, combined with the fall in the GBP saddled the fund?s property portfolio with a 1.4% loss in the second quarter. The shocking amount of $240 million.

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Samantha Goodman
Samantha Goodman 11 Aug 2017

Interesting point of view.

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