Taylor Scott International News
The majority of households in the UK perceive that the value of their home rose in February but this level of optimisim is moderating, according to the latest house price sentiment index. Some 19% of the 1,500 households surveyed across the UK said that the value of their home had risen over the last month, while 6% reported a fall, the data from the Knight Frank and Markit Economics report shows. This gave the HPSI a reading of 56.5, the twenty third consecutive month that the reading has been above 50 but February’s index represents the lowest perceived rate of price growth since August 2013. Households in 10 of the 11 regions covered by the index report that prices rose in February, with Scotland at 49.4 the only exception. This is the first time any region within Great Britain has reported a price fall in 18 months. The future HPSI, which measures what households think will happen to the value of their property over the next year, fell again in February to 68.2, down from 69.5 in January. This is the third consecutive monthly fall in house price expectations across the UK and the lowest reading since August 2013. The future HPSI stands well below its record high of 75.1, which was seen in May 2014. Households in the South East at 73.8 expect the strongest price rises over the next 12 months, followed by those in the East of England at 72.9 and London also at 72.9. However, households in Scotland still expect average prices to rise over the coming 12 months with a level of 61, despite a perception that prices fell in February. ‘The easing in house price sentiment indicates that the market is in for a steadier year than 2013 or 2014. While buying intentions are relatively high, there is less conviction that prices will rise strongly this year. Just 43% of households expect the value of their home to rise over the next 12 months, compared to 55% in February last year,’ said Grainne Gilmore, head of UK residential research at Knight Frank. ‘The moderation in sentiment comes despite the prospect of a prolonged period of ultra-low rate inflation and low unemployment. However new mortgage rules and affordability constraints in some parts of the country are likely to weigh on price growth. In the shorter-term, many households are focussing on the election, the outcome of which could change some household finances if taxes or benefits are reformed,’ she added. According Tim Moore, senior economist at Markit, despite a sustained retreat in recent months, the latest survey indicates that overall house price sentiment remains at an elevated level by historical standards. ‘Around six times as many UK households forecast a rise in their property value during the year ahead as those that expect a decline. Improving mortgage availability, rising consumer confidence and a reduced likelihood of impending interest rate rises all look set to support UK property prices over the course… Taylor Scott International
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