Households in the South East most upbeat about current and future house price growth
Households across the UK perceive that the value of their home has risen over the last month, according to the latest House Price Sentiment Index (HPSI) from Knight Frank and IHS Markit.
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Change in current house prices
Some 20.6% of the 1,500 households surveyed across the UK said that the value of their home had risen over the last month, while 5.8% said that prices had fallen. This resulted in a HPSI reading of 57.4, marginally lower than both March and February’s reading of 57.5.
The index does still remain below its peak of 63.2 reached in May 2014.
The fact that UK household sentiment was relatively unchanged in April compared with both March and February suggests that households currently perceive steady, rather than spectacular growth.
However, sentiment remains polarised across the regions, led by households in the South East (63.1), reflecting the current ‘multi-speed’ nature of the market. For the second consecutive month, those living in the North East (49.9) reported a slight fall in prices in April.
Outlook for house prices
The future HPSI, which measures what households think will happen to the value of their property over the next year, rose to 67.1 in April, up from 66.8 in March.
Looking at households by tenure, those who own their own home were the most confident that prices would rise (72.4), followed by mortgage borrowers (70.9).
Tim Moore, senior economist at IHS Markit, said: “April’s survey reveals that UK households’ confidence regarding the outlook for their property value remains close to its highest since the EU referendum, despite a recent loss of momentum in mainstream house price indices.
“Relatively upbeat house price sentiment also contrasts with a renewed squeeze on real incomes from rising inflation. This suggests that the resilient economic backdrop and ultra-low mortgage rates have been key factors behind the rebound in confidence since last summer.
“Looking at regional house price expectations since the EU referendum, the main development has been a far narrower gap in confidence between London and the rest of the UK. Meanwhile, people in the South East have reported the largest bounce in sentiment from the low point seen in July 2016, followed by those in the East Midlands.”
Read the full House Price Sentiment Index.