Taylor Scott International News
Households across the UK perceive that the value of their home rose in May, according to the latest house price sentiment index to be published. Some 25.6% of the 1,500 households surveyed for the index from Knight Frank and Markit Economics across the UK said that the value of their home had risen over the last month, while 3.6% said that prices had fallen. This resulted in a HPSI reading of 61.0 and although this was a slight increase on the 60.1 recorded in April, it remains below the peak of 63.2 reached two years previously in May 2014. The index report says that while sentiment picked up over the course of the month, it remains in line with the longer term trend. On a three month rolling basis the HPSI reading was 60.6 compared to 59.2 for the comparable period three months previously There was a notable pick-up in perceived house price growth among those aged 18 to 24 with the index rising to 57.7 in May, up from 52.6 in April, potentially reflecting affordability concerns among this age group. Conversely, household sentiment softened among those aged over 55 month on month, although such individuals remain the most bullish when it comes to perceived price growth. According to Gráinne Gilmore, head of UK residential research at Knight Frank, the steadiness of the headline house price sentiment index during such political uncertainty over the future of the UK in the European Union is a reflection that the fundamentals of the market remain unchanged. ‘There is still an imbalance between demand and supply of housing, and for those with access to deposit payments, mortgage rates are still near record lows. However, there has been some softening in sentiment among those aged 55 and over, the age-group who have the largest equity stake in the UK housing market,’ she pointed out. ‘While the sentiment reading for this group is still one of the highest, indicating they expect prices to rise, there has been a notable fall from last month, indicating that the current economic and political climate is affecting some corners of the market,’ she added. The future HPSI, which measures what households think will happen to the value of their property over the next year, rose slightly in May to 70.3, from 68.8 in April. Households in the South East were the most confident that prices will rise in the next 12 months at 79.5, followed by those in London at 78.2 and the East of England at 77.9. Expectations that interest rates will remain low for longer, as shown by Markit’s UK Household Finance Index, appear to have helped offset any concerns over the wider economic backdrop. Around 46% of households expect rates to rise in the next 12 months, down sharply from a peak of 78% in August 2015. Tim Moore, senior economist at Markit, explained that house price sentiment not only rose in May, but moved above the 2016 peak… Taylor Scott International
Taylor Scott International, Taylor Scott
