Property owners in London who have seen their properties continue to rise over the past few years, are among the homeowners who believe they will see an increase in the price of their property over the next 12 months, followed by those in the South East and Wales.
Some households think that the value of their property has reduced over the past month, but say they have done so at the slowest rate since 2010. 8.5% of homeowners said that they feel as though their homes have risen over the past month, while 11.7% said they felt as though the value of their home had decreased, giving a HPSI reading of 48.4. If this figure is under 50 it shows that prices are falling and if the figure is over 50 it shows they are rising.
This figure o f 48.4% is up from 47.6 from last month, and is also the highest reading since June 2010. Since the creation of the HPSI, the index has been a clear indicator of house trends. This index bases its findings on household sentiment rather than historical evidence or mortgage market evidence.
Grainne Gilmore, head of the UK residential research as Knight Frank commented: ‘The optimism over house prices seen at the start of the year has strengthened sharply this month, with households now more upbeat about the outlook for house prices than at any time since June 2010. Households in every region expect prices to rise, reflecting a real change in outlook across the country,’
‘The data suggests that households have brushed off the rather gloomy economic news, and instead have been buoyed by positive signals emanating from the mortgage market in recent weeks, with lending rates falling sharply and lending to new buyers picking up. Indeed the HPSI readings show that mortgage borrowers are among those who are most optimistic about house prices. Likewise, the outlook of those aged between 35 and 44 has becoming much more positive, and it is these buyers, who will typically be buying their first or second property, who are set to benefit from the looser mortgage lending conditions,’ she explained.
‘There are hopes that the Bank of England’s Funding for Lending scheme will further boost lending this year, and signals from the new Bank of England Governor that the base rate may be kept on hold for a prolonged period will only help those trying to climb onto the property ladder,’ she added.
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