House price sentiment strengthens

The latest report from Knight Frank and IHS Markit has found that, during March, households across the UK perceived that the value of their home rose.

Related topics:  Property
Warren Lewis
27th March 2017
house stats
"UK house price sentiment was relatively upbeat in March, which provides another signal that confidence has gradually picked up during the first quarter of 2017"

The latest report from Knight Frank and IHS Markit has found that, during March, households across the UK perceived that the value of their home rose.

According to the report, the March reading was the eighth consecutive month that the index has been in positive territory and was unchanged compared with February.

Respondents in nine of the 11 regions covered by the index believe the value of their home increased this month, led by those in the South East. The future HPSI fell slightly in March although it remains comfortably higher than its post-referendum low

Households in all regions expect the value of their home to increase over the next 12 months

Oliver Knight, an Associate in Knight Frank’s Residential Research team, said: “The latest survey data suggests that house price sentiment across the UK is becoming steadier. Households still report that values are increasing, but at a more modest pace than before the EU Referendum, which is consistent with wider housing market trends.
 
Future price expectations remain in positive territory, especially in the South and Midlands, but there are a number of headwinds which could weigh on the market, including rising inflation and second-round effects from Brexit. Yet at the same time, a lack of supply of housing for sale is underpinning pricing across much of the UK.”

Tim Moore, senior economist at IHS Markit, said: “UK house price sentiment was relatively upbeat in March, which provides another signal that confidence has gradually picked up during the first quarter of 2017. This suggests that ultra-low mortgage rates and the resilient UK labour market are helping to offset the drag on house price sentiment from squeezed consumer finances.
 
While sentiment has rebounded strongly since last summer, house price expectations are still much more subdued than those reported in the three years leading up to the EU referendum.

Looking at house price expectations for the next 12 months, regional divergences widened across the UK during March. In particular, household sentiment in Scotland fell to the weakest for over four years, and the gap relative to UK-wide price expectations was the greatest since the survey began in 2009.
 
Meanwhile, the latest survey saw London drop into the bottom half of the UK regional table for the first time since April 2010. By contrast, people living in the West Midlands were more confident about the outlook for their property values than at any time in the past two-and-a-half years.”

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